CHARLES SCHWAB INVESTMENT MANAGEMENT INC

Investment Strategies and Risk of Loss In managing discretionary client accounts, providing recommendations to non-discretionary clients and creating model portfolios, CSIM uses various investment strategies and methods of analysis, as described below. This section also contains a discussion of the primary risks associated with these investment strategies, although it is not possible to identify all of the risks associated with investing and the particular risks applicable to a client account will depend on the nature of the account, its investment strategy or strategies, and the types of securities held. Where available, please refer to the applicable prospectus or other offering documents for a more detailed discussion of strategies and risks involved with your particular account.

CSIM creates diversified portfolios that primarily consist of ETFs and/or mutual funds in a single account for several SMA Strategies and certain pooled investment vehicles it manages on a discretionary basis. CSIM also creates model portfolios that consist of ETFs and/or mutual funds. Additionally, CSIM provides nondiscretionary investment advice to the CSTB collective trust funds regarding investments in ETFs and/or mutual funds. The guidelines for asset allocations CSIM has for each SMA Strategy, pooled investment vehicle, model portfolio, or CSTB collective trust fund differ from the others. However, certain pooled investment vehicles or CSTB collective trust funds may have substantially equivalent strategies. In such circumstances, the guidelines for multiple pooled investment vehicles or CSTB collective trust funds CSIM manages may be substantially similar. There may be times when CSIM chooses the same ETF or mutual fund for different SMA Strategies, pooled investment vehicles, model portfolios, or CSTB collective trust funds; however, portfolio management personnel make investment decisions based on the investment objectives and parameters set for each SMA Strategy, pooled investment vehicle, model portfolio, or CSTB collective trust funds. CSIM has adopted policies and procedures to address conflicts of interest that may arise.

While CSIM seeks to manage accounts so that risks are appropriate to the return potential for the strategy, it is often not possible or desirable to fully mitigate risks. Any investment includes the risk of loss and there can be no guarantee that a particular level of return will be achieved. Clients should understand that they could lose some or all of their investment and should be prepared to bear the risk of such potential losses. Clients should be aware that while CSIM does not limit its advice to particular types of investments, client mandates may be limited to certain types of securities (e.g., equities) or to the recommendation of investment advisers or pooled investment vehicles and may not be diversified. Unless specifically discussed with a client, the accounts managed by CSIM are generally not intended to provide a complete investment program for a client or investor and CSIM expects that the assets it manages typically do not represent all of the client’s assets. Clients are responsible for appropriately diversifying their assets to guard against the risk of loss. CSIM receives a broad range of research from a wide variety of sources that includes CS&Co.-affiliated entities, other brokers, and independent research providers, including issuers and trading partners. CSIM may use written reports prepared by recognized analysts who are specialists in the industry and may use computer-based models to assist in portfolio management. CSIM may also use statistical and other information published by third-party data providers, industry, and government, information gathered at meetings of professionals within the industry, and its own research of investment trends.

Each SMA Strategy that CSIM manages, except the SIP Program, maintains a cash component which may be invested in short-term debt instruments, a money market fund (which may be a Registered Fund managed by CSIM), a collective trust fund, an index futures contract or an ETF depending on the particular product or strategy. For the SIP program, the SIP Cash Allocation is invested in the SIP Sweep Program, which is described in the Schwab Intelligent Portfolios disclosure brochure provided to SIP Program clients.

Certain CSIM portfolio managers make investment decisions for multiple client types, including with respect to their own accounts, and across multiple strategies or

Pooled Investment Vehicles Methods of Analysis and Investment Strategies

Portfolios accounts may include, but are not limited to, individual stocks and bonds. Eligible Registered Funds include, but are not limited to, those that are managed by CSIM and those with which CS&Co. has a strategic provider relationship. In selecting Registered Funds for Schwab Wealth Portfolios, CSIM will always consider all applicable Registered Funds managed by CSIM and those with a strategic provider relationship in its determinations of which Registered Funds to invest in for a particular asset class.

With respect to the Registered Funds and Private Funds it manages, CSIM utilizes different methods of analysis that are tailored to each Registered Fund’s and Private Fund’s investment objective and strategies and are described, along with applicable risks, in their respective offering documents. Shareholders of the Registered Funds and potential investors should carefully read the relevant offering documents.

Each Schwab Wealth Portfolios strategy applies one of six different broadly diversified, strategic asset allocations. These include five total return asset allocations that span conservative, moderate conservative, moderate, moderate aggressive and aggressive risk profiles, along with one income asset allocation. Strategies, including asset allocation and underlying investments, are reassessed periodically and subject to change as deemed appropriate and without notice. A portion of all Schwab Wealth Portfolios is maintained in cash or cash equivalents, such as a money market fund. CSIM employs both quantitative and qualitative processes to help guide investment decisions and manage portfolio risk. Actual client account asset allocations may also naturally drift from targets over time (for example, in response to changing market conditions). These deviations are systematically reviewed and rebalanced as warranted.

Non-Discretionary Methods of Analysis and Investment Strategies CSIM provides non-discretionary investment advice to CSTB with respect to collective trust funds that encompass a number of distinct investment strategies, which are governed by each collective trust fund’s governing and/or offering documents. Such nondiscretionary investment advice includes periodic evaluation of the performance of third party sub-advisers and underlying pooled investment vehicles to the collective trust funds, evaluation of compliance by the sub-advisers with any relevant policies and procedures, including best execution and other broker practices, and recommendations to select or terminate sub-advisers or underlying pooled investment vehicles. When providing recommendations to CSTB about the selection, monitoring and removal of sub-advisers or underlying pooled investment vehicles, CSIM considers both qualitative and quantitative factors. Quantitative statistics considered include, but are not limited to, risk adjusted results over multiple time periods relative to peer groups and benchmarks, and return patterns in rising and falling markets. The qualitative review includes, but is not limited to, strategy philosophy and process, investment team, firm, compliance, investment and operational risks, institutional experience, portfolio characteristics, and fit with other sub-advisers or underlying pooled investment vehicles in a portfolio context.

Additionally, strategies may be designed for different investor preferences. For example, some strategies are designed to have exposure to government, corporate, agency, taxable municipal, or other types of bonds subject to state and/or federal taxation. Conversely, other strategies are instead designed to have exposure to municipal bonds whose interest income is typically exempt from federal taxes, as well as potentially state and/or local taxes. Separately, all strategies provide the option for clients to elect additional tactical asset allocation tilts, which involve deviations from the strategic allocation based upon shorter-term financial considerations. CSIM may be limited in its ability to make asset allocation adjustments due to frequent trading restrictions or redemption fee policies of the underlying Registered Funds.

Schwab Wealth Portfolios Methods of Analysis and Investment Strategies Schwab Wealth Portfolios are multi-asset class portfolios comprised of Registered Funds or SMA strategies and Registered Funds in a single discretionary account and are only available to clients enrolled in the SWA Program. Eligible SMA strategies can include, but are not limited to, the SMA Strategies managed by CSIM. CSIM may change, add, or remove SMA strategies used in Schwab Wealth Portfolios at any time. Depending upon the amount being invested, Schwab Wealth Portfolios clients can choose portfolios that are comprised of SMAs and Registered Funds or just Registered Funds. Assets in SMAs within Schwab Wealth

Descriptions of the Schwab Wealth Portfolios asset allocation strategies are below. Please note that although some Schwab Wealth Portfolios asset allocation strategies are designed to be less risky than others, all investments in securities involve a risk of loss, including the loss of all of the money you initially invest. In addition, the portion of the Schwab Wealth Portfolios accounts invested in SMA strategies, including CSIM managed SMA Strategies, can perform differently and be lower or higher than if the client had invested directly in those SMA strategies due, but not limited, to differences

in: (i) timing of reinvestment of mutual fund sale proceeds; (ii) timing of trade generation and execution; and (iii) client-initiated tax-loss harvesting methodology.

use a tactical asset allocation approach. The strategies generally consist of broadly diversified asset allocations that are reassessed periodically, including asset allocation and underlying securities, and subject to change as deemed appropriate and without notice. A portion of all Selective Portfolios strategies is maintained in cash or cash equivalents, such as a money market fund. CSIM employs both quantitative and qualitative processes to help guide investment decisions and manage portfolio risk. Each portfolio is designed so that the asset allocation is consistent with a certain combination of investment objectives and risk tolerance. Actual client account asset allocations may also naturally drift from targets over time (for example, in response to changing market conditions). These deviations are systematically reviewed and rebalanced as warranted.

Conservative. The strategy is for investors seeking income with lower volatility. The strategy primarily offers exposure to fixed income assets with some equity exposure. The fixed income exposure may be to either taxable bonds or bonds that are exempt from federal taxes, as well as potentially state and local taxes. Moderately Conservative. The strategy is for investors primarily seeking income and secondarily modest capital appreciation. A majority of the exposure in the strategy is to fixed income but with a significant percentage invested in equity. The fixed income exposure may be to either taxable bonds or bonds that are exempt from federal taxes, as well as potentially state and local taxes.

Selective Portfolios Core Mutual Fund. The strategies offer clients a portfolio of investments that is comprised of mutual funds and a portion of the account that is maintained in cash or cash alternatives. Eligible mutual funds include mutual funds that are managed by CSIM. CSIM selects and allocates assets among domestic equity, international equity, domestic fixed income, international fixed income, specialty mutual funds, and cash equivalents. CSIM may be limited in its ability to make asset allocation adjustments due to frequent trading restrictions or redemption fee policies of the underlying mutual fund companies.

Moderate. The strategy is for investors seeking a balance between capital appreciation and income. The strategy offers exposure to a mix of fixed income and equity. The fixed income exposure may be to either taxable bonds or bonds that are exempt from federal taxes, as well as potentially state and local taxes. Moderately Aggressive. The strategy is for investors seeking capital appreciation who are willing to accept moderately higher volatility. The strategy has exposure to both equity and fixed income, with a majority in equity. The fixed income exposure may be to either taxable bonds or bonds that are exempt from federal taxes, as well as potentially state and local taxes.

Selective Portfolios Core ETF. The strategies offer clients a portfolio of investments that is comprised of ETFs and a portion of the account that is maintained in cash or cash alternatives. Eligible ETFs include Schwab ETFs, which are managed by CSIM. CSIM selects and allocates assets among domestic equity, international equity, domestic fixed income, international fixed income, specialty ETFs, and cash equivalents.

Aggressive. The strategy is for investors concerned with seeking high levels of capital appreciation who are willing to accept higher volatility. The strategy primarily offers exposure to equity with some fixed income exposure. The fixed income exposure may be to either taxable bonds or bonds that are exempt from federal taxes, as well as potentially state and local taxes.

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CSIM provides discretionary investment advice to Registered Funds and Private Funds. CSIM also provides non-discretionary investment advice to trustees of collective trust funds. In addition, CSIM provides discretionary investment advice to the SMA Strategies. As noted below, the SMA Strategies have minimum investment requirements imposed by CSIM, sponsors of Wrap Fee Programs, including the Schwab Managed Account Programs, brokers and custodians for Broker/Custodian-Related Programs, or by Primary Advisors that can differ from each other. If the market value of a client account falls below this specified minimum due to withdrawal of assets from the account, clients may be required to deposit additional money or securities to bring the account up to the required minimum, and CSIM reserves the right to discontinue management of such client accounts. Exceptions to this policy for Direct Clients are made at CSIM’s discretion. In addition, client accounts in the same SMA Strategy may not hold all of the same securities due to a variety of reasons, including, but not limited to, the price of portfolio securities, an account’s lower balance, or client imposed investment restrictions. Performance may be lower or higher for such client accounts. Lastly, CSIM provides model portfolios to unaffiliated Sponsors, CSTC and CS&Co.

Additional Fees for Direct Clients In addition to the fees described above for SPI, ThomasPartners Strategies, Wasmer Schroeder Strategies, and Windhaven Strategies, clients will incur additional costs, which include fees charged by the client’s custodian for account maintenance, and may also include industry fees, transaction fees, commissions, mark-ups and mark-downs, or brokerage fees on the purchase and sale of securities in their accounts. Such costs will be paid directly from clients’ accounts to the broker-dealer who completes the purchase or sale. For those clients that have selected CS&Co. as their custodian, CS&Co. has a policy to waive all of its trading commissions, if any, on those accounts managed by CSIM. In the event any such commissions are inadvertently charged, CS&Co. and CSIM will use good faith efforts to reimburse such commissions promptly after discovery. Please note that CS&Co.’s waiver does not extend to any other non- CS&Co. brokerage fees. ETFs and mutual funds held in the SMA Strategies are subject to operating expenses and fees as set forth in the prospectuses of those funds. These fees and expenses are paid by the funds but ultimately are borne by clients as fund shareholders, and are in addition to the SMA Strategies fee. Clients pay the OERs of funds used in the portfolios, which affects the performance of the SMA Strategies accounts. CSIM may also provide access to certain ETFs, mutual funds, or classes of funds that a client might normally not be qualified to purchase. If an account terminates, these investments may be liquidated or exchanged for the share class available for the particular client’s individual investment in the fund.

Schwab Wealth Portfolios Clients of Schwab Wealth Portfolios offered through Schwab Wealth Advisory™ (the “SWA Program”) primarily include individuals, trusts or estates, and corporations or other businesses. Eligible accounts include, but are not limited to, IRAs and retirement accounts for retirement plans that include only selfemployed individuals and their spouses. The SWA Program excludes other types of retirement plan accounts, offshore trust accounts, certain pledged asset accounts, charitable gift accounts, and state and municipal government entities. Clients must meet the SWA Program minimums prior to investing in Schwab Wealth Portfolios. The minimum investment required to open an account in Schwab Wealth Portfolios in the SWA Program is at least $25,000 per account. Please refer to Schwab Wealth Advisory, Inc.’s (“SWAI”) disclosure brochure and CS&Co.’s disclosure brochure for information on the SWA Program.

Information relating to CSIM’s brokerage practices is included in the “Brokerage Practices” section of this brochure.

Item 6 — Performance-Based Fees and Side-by-Side Management Fee arrangements vary by client, and are based on a number of different factors. Performance-based fees that CSIM receives are based on the asset growth of a client’s account. The timing and amount of performance-based fees are described in the client’s investment management agreement. Clients should be aware that when CSIM receives performance-based fees, CSIM has an incentive to choose investments that are riskier or more speculative than might otherwise be chosen.

Selective Portfolios Clients of Selective Portfolios in the Schwab Managed Account Programs primarily include individuals, trusts or corporations. Government entities and certain accounts subject to ERISA are not eligible for Selective Portfolios. The minimum investment required to open an account in Selective Portfolios in the Schwab Managed Account

Programs is at least $25,000 per account. The Selective Portfolios strategies are closed to enrollments by new clients. Only clients who already have a Selective Portfolios account as of September 5, 2023, will be able to open new Selective Portfolios accounts.

Program. ERISA accounts are only eligible for SMPMutual Fund Third Party strategies composed entirely of third-party mutual funds. The minimum investment required to open an account in the SMP Program in the Schwab Managed Account Programs is $25,000 for all account types.

SGP

SPI

Clients of SGP in the Schwab Managed Account Programs primarily include individuals, trusts, estates, charitable organizations, retirement plans, pension and profit-sharing plans, other corporations, business entities, or investment advisers. Government entities and certain accounts subject to ERISA are not eligible for SGP. The minimum investment required to open an account is $25,000 for SGP Wrap accounts in the Schwab Managed Account Programs. SGP is closed to enrollments by new clients. Only clients who already had SGP accounts as of May 26, 2020, can open new SGP accounts.

Clients of SPI primarily include individuals, trusts, corporations, or other business organizations. The minimum investment required to open an account in SPI is at least $100,000 per account. For Direct Clients, exceptions to the minimum investment requirement are made at CSIM’s discretion.

ThomasPartners Strategies Clients of ThomasPartners Strategies primarily include individuals, trusts, estates, charitable organizations, retirement plans, pension and profit-sharing plans, state or municipal government entities, other corporations, business entities, or investment advisers. Certain accounts subject to ERISA are not eligible for the ThomasPartners Strategies on the Schwab Managed Account Programs or for other Wrap Fee Programs. The minimum investment required for a Direct Client in ThomasPartners Strategies is at least $100,000 per account and $500,000 per household. For Direct Clients, exceptions to the minimum investment requirement are made at CSIM’s discretion.

SIP Program Pursuant to the enrollment criteria established by CS&Co., clients of the SIP Program primarily include individuals, living trusts, and IRAs. Organizations, such as corporations, limited liability companies, and limited partnerships, may also participate in the SIP Program as a client. These types of clients may not have the same client experience as individuals or trust clients. Government entities and accounts that are subject to ERISA, are not eligible for the SIP Program.

Wasmer Schroeder Strategies

To be initially invested in an investment strategy, clients must meet all requirements of CS&Co. to open an account in the SIP Program and fund it with the applicable minimums. SIP clients must establish their account with a minimum of $5,000 in each account. There is also a minimum balance requirement to request that CSIM employ a tax-loss harvesting strategy, and a minimum balance requirement to maintain a tax-loss harvesting strategy.

Clients of Wasmer Schroeder Strategies primarily include individuals, trusts, banking or thrift institutions, charitable organizations, pension and profit-sharing plans (other than plan participants), investment companies, pooled investment vehicles (other than investment companies), state or municipal government entities, insurance companies, and corporations or other business entities not listed above. Certain accounts subject to ERISA are not eligible for the Wasmer Schroeder Strategies on the Schwab Managed Account Programs. The minimum investment required to open a Direct Client account in a Wasmer Schroeder Strategy varies by strategy, but is at least $250,000 per account. For Direct Clients, exceptions to the minimum investment requirement are made at CSIM’s discretion.

CS&Co. may terminate a client from the SIP Program for failing to fund or maintain their account with the required minimum, for failure to maintain a valid email address, or for any other reason, at CS&Co.’s sole discretion. Upon unenrollment from the SIP Program, the client’s enrollment in the SIP Sweep Program will terminate and the account will no longer be managed.

Windhaven Schroeder Strategies

SMP Program

Clients of Windhaven Strategies primarily include individuals, trusts, estates, charitable organizations, retirement plans, pension and profit-sharing plans, state or municipal government entities, other corporations, business entities, or investment advisers. The minimum investment required for a Direct Client to open an account in a Windhaven Strategy is at least $100,000 per

Clients of the SMP Program in the Schwab Managed Account Programs primarily include individuals, trusts (including trusts directed by an affiliate), charitable organizations, investment clubs, corporations, and other business organizations. Government entities and certain accounts subject to ERISA are not eligible for the SMP

account. For Direct Clients, exceptions to the minimum investment requirement are made at CSIM’s discretion.

programs using various investment strategies. These portfolio management responsibilities create conflicts of interest. The conflicts of interest that arise in managing multiple accounts include, for example, conflicts among investment strategies, conflicts in the allocation of investment opportunities, or conflicts due to different fees. Some accounts have higher fees than others. Also, clients with larger assets under management generate more revenue for CSIM than smaller accounts. These differences give rise to a conflict that a portfolio manager would favor one account over another or allocate more time to the management of one account over another. CSIM portfolio management personnel make investment decisions based on the investment objectives and parameters set for each strategy or program. In addition, CSIM has adopted policies and procedures to address any conflicts of interest that may arise, including appropriate information barrier policies.

• CSIM has added disclosures regarding performance-based fees that it receives from certain clients.

Item 8 — Methods of Analysis, Investment Strategy and Risk of Loss • CSIM modified the discussion of its methods of analysis and investment strategies. CSIM modified certain risks currently disclosed in the brochure and added additional risks where CSIM believes that additional disclosure would be beneficial to investors.

Item 10 — Other Financial Industry Activities and Affiliations • CSIM modified the discussion of its relationship with affiliates to disclose new and modified relationships, including removing disclosure that the Schwab Equity Ratings are created by Schwab.

Contents Item 4 — Advisory Business ........................................................................................................................................... Item 5 — Fees and Compensation ................................................................................................................................. Item 6 — Performance-Based Fees and Side-by-Side Management ............................................................................ Item 7 — Types of Clients .............................................................................................................................................. Item 8 — Methods of Analysis, Investment Strategies and Risk of Loss........................................................................ Item 9 — Disciplinary Information .................................................................................................................................. Item 10 — Other Financial Industry Activities and Affiliations ........................................................................................ Item 11 — Code of Ethics, Participation or Interest in Client Transactions and Personal Trading................................. Item 12 — Brokerage Practices ...................................................................................................................................... Item 13 — Review of Accounts ....................................................................................................................................... Item 14 — Client Referrals and Other Compensation .................................................................................................... Item 15 — Custody ......................................................................................................................................................... Item 16 — Investment Discretion ................................................................................................................................... Item 17 — Voting Client Securities ................................................................................................................................. Item 18 — Financial Information ....................................................................................................................................

Item 4 — Advisory Business

The affiliated Wrap Fee Programs in which CSIM’s SMA Strategies are made available include the Managed Account Access®, Managed Account Connection®, Schwab Intelligent Portfolios, and Schwab Managed Portfolios programs (the “Schwab Managed Account Programs”) sponsored by Charles Schwab & Co., Inc. (“CS&Co.”). Certain SMA Strategies are also made available through CS&Co.’s Managed Account Marketplace® platform.

Charles Schwab Investment Management, Inc., a Delaware corporation (“CSIM”) that is doing business as Schwab Asset Management™, was founded in 1989 as a wholly-owned subsidiary of The Charles Schwab Corporation (“CSC”), a Delaware corporation that is publicly traded and listed on the New York Stock Exchange. CSIM provides advisory services to separately managed accounts (“SMAs”), registered investment companies, which include mutual funds and exchangetraded funds (“ETFs,” and collectively with the mutual funds, “Registered Funds”), unregistered investment vehicles excepted from the definition of an “investment company” under the Investment Company Act of 1940, as amended (the "1940 Act") (each a “Private Fund”), and collective trust funds. As further described in the “Methods of Analysis, Investment Strategies and Risk of Loss” section, CSIM provides advice about a variety of investments, ranging from equity and fixed income to money market securities and also provides advice as to the selection of investment advisers and pooled investment vehicles for certain clients.

CSIM provides non-discretionary investment management advice to Charles Schwab Trust Bank (“CSTB”), which is an affiliate of CSIM. CSTB maintains the collective trust funds. As required by applicable law, CSTB retains ultimate investment discretion over the collective trust funds and follows or rejects CSIM’s recommendations. CSIM tailors its recommendations to CSTB based on a collective trust fund’s specific investment objectives and investment strategies as set forth in its governing and/or offering documents. A collective trust fund’s governing and/or offering documents may also impose restrictions on investing in certain securities or types of securities. CSIM also provides model portfolios, including models based on certain SMA Strategies (excluding Wasmer Schroeder Strategies), to sponsors of advisory programs and platforms and other financial intermediaries (“Sponsors”) on a non-discretionary basis. In addition, CSIM will work with Sponsors to develop custom model portfolios based upon the Sponsor's instructions and desired allocation. The Sponsor is responsible for providing final approval of the custom model portfolios. In these arrangements, the Sponsors and/or the investment advisers participating in these advisory programs and platforms have the ultimate decision making and discretionary responsibility for the determination of which securities are to be purchased and sold for their accounts and effect all security transactions in connection with such determinations. CSIM does not have any transparency into which securities are ultimately purchased or sold, or the ending portfolio weighting of the accounts of such advisory programs and platforms. In addition, CSIM has no specific knowledge of the Sponsor’s clients or their circumstances. Furthermore, where CSIM customizes a model portfolio at a Sponsor’s direction, it has no due diligence obligations in connection with, nor any responsibility for determining the appropriateness, diversification, and suitability of any such securities or other property included in the model at the Sponsor’s request.

CSIM serves as investment adviser to Registered Funds and Private Funds and provides investment management and administrative services to those Registered Funds and Private Funds. With respect to the Registered Funds and Private Funds it manages, CSIM utilizes different methods of analysis that are tailored to each Registered Fund’s or and Private Fund’s investment objective and strategies and are described, along with applicable risks, in their offering documents. The Registered Funds’ and Private Fund’s offering documents and applicable law also impose restrictions on investing in certain securities or types of securities. CSIM provides investment management services for various SMA strategies (“SMA Strategies”). These SMA Strategies include Schwab Guided Portfolios (“SGP”), Schwab Intelligent Portfolios® (the “SIP Program”), Schwab Managed Portfolios™ (the “SMP Program”), Schwab Personalized Indexing® (“SPI”), Schwab Wealth Portfolios™, Selective Portfolios, ThomasPartners® Strategies, Wasmer Schroeder Strategies®, and Windhaven® Strategies. CSIM also manages SMA Strategies under custom investment mandates for certain clients that are not offered broadly. Depending on the SMA Strategy, CSIM’s clients may include those with whom CSIM has a direct contractual relationship through an investment advisory agreement (“Direct Clients”), those who have enrolled in asset-based wrap fee programs (“Wrap Fee Programs”) and similar programs offered through broker-dealers (“Broker/CustodianRelated Programs”), and clients of other wealth managers (“Primary Advisors”) for programs and relationships in which CSIM acts as an adviser or a subadviser.

CSIM provides model portfolios to its affiliate, Charles Schwab Trust Company (“CSTC”), in connection with the management of trust assets. CSTC is responsible for determining the models to be used for trust assets and has the ultimate decision making and discretionary

responsibility for the determination of which securities are to be purchased and sold for trust accounts. At CSTC’s direction, CSIM directs trades for these trust accounts to its affiliate, CS&Co. CSIM also provides model portfolios to its affiliate, CS&Co. for its platform. CSIM is not responsible for determining which securities to buy or sell for those using the model portfolios provided to CS&Co. There may be differences between the model portfolios provided to Sponsors, CSTC, CS&Co., and the portfolios CSIM manages for its discretionary clients that follow the same or a similar investment strategy. These differences result from various factors, including but not limited to: cash availability, investment restrictions, timing of transactions, account size, holding limits, tax considerations, and trade execution. As a result, the performance of CSIM’s discretionary advisory client portfolios and that of a model portfolio following the same or similar investment strategy may differ.

provides investment management and administrative services to those Registered Funds and Private Funds. The fees paid to CSIM by the Registered Funds and Private Funds are (i) based upon a percentage of each fund’s averaged daily net assets, (ii) described in their respective offering documents, and (iii) reflected in their financial statements. For certain Registered Funds, CSIM and/or its affiliates have agreed to reimburse those Registered Funds to the extent that the Registered Funds’ total annual operating expenses exceed a specified limitation.

Non-Discretionary Investment Advice Pursuant to an agreement between CSIM and CSTB, CSIM is entitled to receive a fee from CSTB based on the costs incurred by CSIM to provide the services, utilizing a cost allocation methodology agreed upon between CSIM and CSTB. The fee is payable monthly to CSIM. Collective trust funds may incur custodian fees, brokerage fees, and other transaction costs in connection with purchasing or selling securities recommended by CSIM and may also incur expenses related to underlying pooled investment vehicles. CSIM’s fees do not cover the costs of operating the collective trust funds in general, such as legal fees, audit expenses, and trustee’s fees.

Lastly, CSIM provides models based on the Wasmer Schroeder Strategies to Sponsors on a discretionary basis (“Wasmer Schroeder Discretionary Models”), meaning CSIM has discretionary responsibility for determining which securities are to be purchased and sold and effects all security transactions in connection with such determinations. For more information regarding transactions involving model portfolios, see the section entitled “Brokerage Practices”.

CSIM does not enter into agreements directly with the collective trust funds and accordingly does not receive direct compensation from, or negotiate fees with, them.

CSIM sponsors, develops, coordinates the calculation of and maintains indexes (each, an “Index”) based on investment and trading strategies and concepts developed by CSIM. Some of the Registered Funds and SMA Strategies for which CSIM acts as investment adviser seek to track the performance, or mimic the characteristics, of the Indexes by investing in the constituents of such Indexes or a representative sample of such constituents of the Indexes. CSIM publishes Index constituent data on a daily basis and Index returns on a monthly basis. In addition, CSIM will not provide any information relating to changes to the Indexes’ methodology for the inclusion or exclusion of component securities or methodology for the calculation or the return of component securities to CSIM portfolio management teams in advance of a public announcement of such changes by CSIM.

Model Portfolios Generally, CSIM does not receive fees with respect to non-discretionary model portfolios it provides to unaffiliated Sponsors, CSTC, and CS&Co. for its model platform. CSIM does receive a fee from unaffiliated Sponsors for non-discretionary ThomasPartners Strategies models based on a percentage of the Sponsor’s client assets being managed pursuant to such models. CSIM also receives a fee for certain models provided to CSTC based on a percentage of assets being managed pursuant to CSIM’s models. Lastly, CSIM receives a fee for Wasmer Schroeder Discretionary Models based on a percentage of the Sponsor’s client assets being managed pursuant to such models. CSIM and its affiliates receive fees from any investments in CSIM managed Registered Funds that are included in the model portfolios. If CSIM includes in any model portfolios, third party mutual funds or ETFs that have an agreement with CS&Co., a strategic provider relationship with CS&Co. or an agreement with CSIM, CSIM’s affiliates may receive fees from such third party based on assets attributable to such funds being managed pursuant to CSIM’s models. See “Participation or Interest in Client Transactions” section below for details on the strategic provider relationships.”

As of December 31, 2025, CSIM managed approximately $1,697,040,740,565 in client assets on a discretionary basis and approximately $23,985,174,331 in client assets on a non-discretionary basis.

Item 5 — Fees and Compensation Pooled Investment Vehicles As described above, CSIM serves as investment adviser to certain Registered Funds and Private Funds and

SMA Strategies Fees

Schwab Managed Account Programs

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Activities and Affiliations

Limitations of Disclosure. The foregoing list of risks does not purport to be a complete enumeration or explanation of the risks involved in CSIM’s strategies. As the strategies develop and change over time, clients and investors may be subject to additional and different risk factors. No assurance can be made that profits will be achieved or that substantial losses will not be incurred.

As a wholly owned subsidiary of CSC, CSIM leverages the resources of CSC, CS&Co., and their affiliated companies, such as personnel including, but not limited to, its Chief Compliance Officer (“CCO”); Chief Legal Officer; legal and compliance support; sales, marketing, technology, operations, finance, human resources, and risk management personnel. CSIM pays CS&Co. for the services of certain employees and for the facilities and equipment necessary to enable it to provide advisory services to clients. Certain CSIM and CS&Co. personnel have reporting relationships to personnel of affiliated entities. These arrangements and others noted below create the potential for conflicts of interest to arise. These potential conflicts of interest are governed by various policies adopted by CSIM. For example, CSIM has adopted policies and procedures reasonably designed to protect against the misuse of information (and mitigate potential conflicts of interest) whether among CSC affiliated entities or entities or individuals outside of CSC and its affiliates. Other wholly owned subsidiaries of CSC are engaged in investment advisory, brokerage, trust, custody, or banking services.

Item 9 — Disciplinary Information In June 2022, Charles Schwab Investment Advisory, Inc. and its affiliate CS&Co. (collectively, “Schwab,” for purposes of this matter description only) reached an agreement with the SEC to settle a matter related to historical disclosures and marketing of the SIP Program. Although CSIM was not a party to this matter, because CSIM has become the investment adviser to the SIP Program, the disclosure regarding this matter has been included in CSIM’s disclosure brochure. The SEC found that Schwab, along with its former affiliate, Schwab Wealth Investment Advisory, Inc., violated certain provisions of the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and the rules thereunder, from March 2015 through November 2018. The SEC found that Schwab made false and misleading statements in Form ADV Part 2A brochures about the cash allocations in SIP Program accounts, in particular about: (1) Schwab’s conflict of interest in setting the cash allocations; (2) the influence of this conflict of interest on the size of the cash allocations; and (3) the negative effect of the cash allocations on performance in SIP Program accounts under market conditions where other assets such as equities outperform cash. The SEC also found that Schwab failed to sufficiently implement compliance policies designed to prevent the publication of misleading statements. Finally, the SEC found that Schwab made similarly misleading statements in advertisements for the SIP Program.

Charles Schwab & Co., Inc. CSIM is under common control with CS&Co., which is both a registered broker-dealer and a registered investment adviser, and a wholly-owned subsidiary of CSC. CS&Co. serves as the principal underwriter for certain Registered Funds managed by CSIM but does not receive any compensation in that capacity. However, CS&Co. receives recordkeeping, shareholder servicing and other administrative servicing fees from certain Registered Funds managed by CSIM. CSIM also pays CS&Co. for the services of certain employees that primarily provide sales and marketing services. CS&Co. may act as a placement agent to a Private Fund but generally does not receive compensation from a Private Fund for the role. CSIM will pay CS&Co. for the services of certain employees that provide services to a Private Fund.

Without admitting or denying these findings, Schwab agreed to pay a total of $186,536,861 in disgorgement, pre-judgment interest, and civil penalties. Schwab also agreed to engage an independent consultant to: (1) review Schwab’s supervisory, compliance, and other policies and procedures designed to ensure that Schwab’s SIP Program-related disclosures, advertising, and marketing communications comply with the requirements of the Advisers Act, and the rules thereunder, and with other applicable federal securities laws with respect to the SIP Program; and (2) submit a report to both Schwab and the SEC describing the independent consultant’s findings and making

CS&Co., as an insurance agency, offers insurance products that make available Registered Funds managed by CSIM as part of the insurance product offering. CSIM selects and recommends investment advisers to act as (i) sub-advisers for Registered Funds advised by CSIM, (ii) sub-advisers to CSTB collective trust funds, (iii) investment advisers of Registered Funds in which CSIM advised Registered Funds or SMAs invest, or (iv)

investment advisers to Registered Funds that are part of model portfolios or are used in CSTB collective trust funds. Such investment advisers may have a business relationship with CS&Co. whereby CS&Co. has agreed to make mutual funds advised by such investment advisers available through CS&Co.’s Mutual Fund Marketplace. CS&Co. receives fees from mutual funds and/or their affiliates for the services CS&Co. provides in connection with CS&Co.’s Mutual Fund Marketplace. In addition, such investment advisers or their affiliates, as third-party ETF sponsors, may pay compensation to CS&Co. for administrative and shareholder services. CSIM does not take into consideration whether an investment adviser advises Registered Funds that compensate CS&Co. when making its recommendations or selections. CS&Co. also makes available certain Registered Funds advised by CSIM through its Schwab Mutual Fund OneSource® service, CS&Co.’s no load, no transaction fee platform.

CS&Co. sponsors the SWA Program, an investment advisory wrap fee program. The SWA Program is a feebased program, which offers periodic non-discretionary investment advice by representatives of SWAI, a registered investment adviser. The SWA Program also includes advice on the use of Schwab Wealth Portfolios managed by CSIM and available only to SWA Program clients. If an SMA Strategies client’s account(s), other than those in the SIP Program, is custodied at CS&Co., uninvested cash, or free credit balance, in the account(s) may be invested in: (1) a money market fund that is managed by CSIM or distributed by CS&Co.; (2) a noninterest-bearing Schwab One® Interest feature; or (3) an interest-bearing Schwab One® Interest feature (collectively, “Schwab Cash Vehicles”). In addition, Direct Client accounts may also have investments in CSIM managed Registered Funds. This presents a conflict of interest because CSIM, CS&Co. and its affiliates can earn income on investments in Schwab Cash Vehicles. The CSIM fees Direct Clients pay will be adjusted relative to the Schwab Cash Vehicle and CSIM managed Registered Funds for retirement accounts, including IRAs and accounts subject to ERISA. CSIM reserves the right to change the manner in which it makes accommodations, to the extent permitted by applicable law. More information about Schwab Cash Vehicles may be found in clients’ brokerage account agreement(s) with CS&Co.

In its role as sponsor of the SMP Program, CSIM’s affiliate, CS&Co., sets the target asset allocations for each SMP Program portfolio and creates the parameters that determine mutual fund and ETF eligibility for the SMP Program. Although CSIM does not favor its own Registered Funds, or disfavor any third-party mutual fund or ETF, in its selection of investments or allocation among investments for the SMP Program portfolios, the parameters and eligibility criteria created by CS&Co. are designed, in part, to favor certain CSIM managed Registered Funds and to disfavor certain third-party mutual funds and ETFs.

CS&Co. effects securities transactions for clients in the SMA Strategies on an agency basis, except in limited circumstances such as when executing certain fractional shares trades. Acting as principal on a trade is a conflict of interest because CS&Co. is on the other side of the transaction from the client. CS&Co. does not charge additional fees on fractional share trades. When CSIM executes fractional shares through CS&Co., the client may receive a price that differs from that of whole shares executed through CS&Co. or another broker-dealer.

In its role as sponsor of the SIP Program, CSIM’s affiliate, CS&Co., sets the target asset allocations for each SIP Program portfolio and creates the parameters that determine ETF eligibility for the SIP Program. Although CSIM does not favor its own Registered Funds, or disfavor any third-party ETF, in its selection of investments or allocation among investments for the SIP Program portfolios, the parameters and eligibility criteria created by CS&Co. are designed, in part, to favor certain CSIM managed Registered Funds and to disfavor certain third-party ETFs. CS&Co. has a financial interest in certain CSIM managed Registered Funds because it or its affiliates receive advisory and recordkeeping, shareholder servicing and other administrative servicing fees from those Registered Funds. This results in higher overall compensation to CS&Co., CSIM, and the ultimate parent entity, CSC. CS&Co. also receives fees from certain third party funds (or their affiliates) in the SMA Strategies and CSIM managed Registered Funds for record keeping, shareholder services, and other administrative services and in certain cases, for marketing and promotion of a third party fund. The aggregate fees CS&Co. or its affiliates receive from the CSIM managed Registered Funds may be greater than the fees CS&Co. receives from third party funds.

Schwab Wealth Portfolios, Selective Portfolios, SGP, SPI, ThomasPartners Strategies, and Windhaven Strategies clients, that invest through the Schwab Managed Account Programs should note that over time only a portion of transactions are executed for their accounts through CS&Co. Wasmer Schroeder Strategies clients that invest through the Schwab Managed Account Programs should note that only the equity portion of transactions may be executed for their accounts through CS&Co. In connection with the SMA Strategies, CSIM provides CS&Co. with composite performance reporting data resources and support, for which CSIM is paid a fee. CSIM provides non-discretionary model portfolios to CS&Co. for its model platform. CSIM is not responsible

for determining which securities to buy or sell for those who invest in model portfolios provided to CS&Co.

CSIM provides investment advice to a number of Registered Funds, and may be deemed to control such funds, although CSIM disclaims any control relationship. CSIM also makes recommendations in connection with the management of certain collective trust funds although CSTB retains ultimate investment discretion over those funds.

discretionary responsibility for the determination of which securities are to be purchased and sold for trust accounts. At CSTC’s direction, CSIM directs trades to its affiliate, CS&Co., for trust accounts invested in the CSTC Models. CSIM also provides proxy voting guidance to CSTC under an inter-company agreement for which CSIM is compensated. CSIM receives a fee from CSTC for the CSTC Models based on a percentage of CSTC’s client assets being managed pursuant to the CSTC Models. For certain trust accounts, CSTC is responsible for determining which of the SMA Strategies are to be used for trust assets and CSIM receives a fee from CSTC for such trust accounts based on a percentage of such trust accounts’ assets managed pursuant to the SMA Strategies.

Charles Schwab Bank, SSB

Schwab Wealth Advisory, Inc.

CSIM is under common control with Schwab Bank. Schwab Bank earns income on cash balances participating in the SIP Sweep Program, which presents a conflict of interest. Additional details regarding the SIP Sweep Program can be found in the Schwab Intelligent Portfolios Sweep Program Disclosure Statement and the Schwab Intelligent Portfolios disclosure brochure. Clients should carefully consider these conflicts of interest prior to enrolling in the SIP Program. Schwab Bank earns income on some of the cash of other SMA Strategies clients custodied at CS&Co.

CSIM is under common control with SWAI. SWAI representatives offer periodic non-discretionary investment advice in the SWA Program, which is a feebased program. The SWA program also includes advice on the use of Schwab Wealth Portfolios managed by CSIM and available only to SWA Program clients. SWAI representatives can also make recommendations on other discretionary SMAs managed by CSIM and offered through other Schwab Managed Account Programs or on investments into Registered Funds managed by CSIM.

Lastly, CSIM provides Schwab Equity Ratings and Schwab Equity Ratings International to CS&Co. for use by CS&Co.’s clients.

Pooled Investment Vehicles

or Interest in Client Transactions and Personal Trading

Charles Schwab Trust Bank CSIM is under common control with CSTB. CSIM provides non-discretionary investment management advice to CSTB pursuant to an agreement between CSIM and CSTB with respect to collective trust funds maintained by CSTB. CSIM also provides CSTB with trading and allocation support, at CSTB’s request. CSTB, however, retains the authority to accept or reject CSIM’s recommendations. In addition, CSIM provides administrative and proxy voting services to, and receives compensation from, CSTB. CSTB further provides custodial and other trust services to certain of CS&Co.’s customers and affiliates. CSTB provides directed trust and custody services to employee benefit or similar types of plans, and makes certain Registered Funds advised by CSIM available to these clients.

Code of Ethics - General CSIM has adopted a code of ethics (the “Code”) pursuant to Rule 204A-1 under the Advisers Act. The Code sets forth standards of business conduct that reflect CSIM’s fiduciary obligations to its clients and requires CSIM employees to comply with all applicable laws, rules and regulations and to promptly report any violation of the Code to a supervisor or CSIM’s CCO or their designee. The Code also requires CSIM’s officers, directors, employees, contractors and any person who is determined to have access to nonpublic information regarding any client or CSIM (“access persons”) to (i) report, and CSIM to review, personal securities transactions and securities holdings periodically, (ii) preclear transactions in covered securities when required, and (iii) confirm compliance with the provisions of the Code on a periodic basis. Covered securities do not include direct obligations of the U.S. government, high quality short-term debt instruments, investments in nonCS&Co. affiliated 529 college savings plans, investment in the Schwab Fund for Charitable Giving, and shares of affiliated and non-affiliated funds. The Code may be

Charles Schwab Trust Company CSIM is under common control with CSTC. CSIM creates certain non-discretionary model portfolios for CSTC (“CSTC Models”) in connection with the management of trust assets. CSIM also offers access to other model portfolios and SMA Strategies to CSTC in connection with the management of trust assets. CSTC is responsible for determining the models to be used for trust assets and has the ultimate decision making and

changed as necessary to remain current with regulatory requirements and internal policies and procedures.

of interest within and among CSIM, CS&Co., and its affiliates. CSIM mitigates these conflicts of interest through its policies and procedures, which include the evaluation of the selection and investment in Registered Funds, including Registered Funds managed by CSIM, consistent with CSIM’s fiduciary duty. Subject to CS&Co.’s oversight as the SMP Program and SIP Program sponsor, the investment decision-making processes of CSIM portfolio management teams are separate and independent from CS&Co.

A client or prospective client may obtain a copy of CSIM’s Code without charge by calling CSIM at (800) 650-9744.

Material Non-Public Information The Code prohibits access persons from disclosing portfolio transactions or any other material non-public information to anyone, other than those who have a business need to know, except as required to effect securities transactions for clients. The Code also prohibits access persons from using material nonpublic information for personal profit or to cause others to profit. Access persons are also prohibited from engaging in deceptive conduct in connection with the purchase or sale of securities for client accounts.

Certain Registered Funds to which CSIM provides investment advice are fund-of-funds. Consistent with the funds-of-funds’ investment objectives and strategies, CSIM may recommend that these funds-of-funds allocate a portion of their portfolios to other Registered Funds advised by CSIM for which CSIM receives investment advisory and/or administration fees. CSIM has policies and procedures in place to establish appropriate controls to identify, and to limit use and distribution of, confidential information about the firm, its businesses and its clients. CSIM does not receive investment management fees from many of the fund-offunds that it manages. For those funds-of-funds that do pay CSIM an investment management fee, the board of trustees of such funds-of-funds meets annually to determine that the amount of the fee is appropriate given the services provided by CSIM. Similarly, CSIM may recommend that certain collective trust funds maintained by CSTB invest in Registered Funds managed by CSIM and other collective trust funds advised by CSTB.

Gifts and Business Entertainment CSIM access persons may not give or accept gifts or business entertainment that violate applicable laws or create a conflict of interest or the appearance of impropriety.

Participation or Interest in Client Transactions CSIM or CS&Co. may recommend that a client purchase securities of CSC, the parent company of both CSIM and CS&Co. Certain Registered Funds managed by CSIM may purchase securities in an underwriting in which CS&Co. participates, to the extent consistent with the 1940 Act and the rules and regulations thereunder. CS&Co., as an insurance agency, offers insurance products that make available Registered Funds managed by CSIM as part of the insurance product offering.

When recommending that the CSIM advised funds-offunds invest in other Registered Funds with multiple share classes, CSIM will recommend that the funds-offunds invest in the lowest cost share class for which the funds-of-funds are eligible. Similarly, when recommending to CSTB that a collective trust fund invest in underlying pooled investment vehicles or Registered Funds with multiple share classes, CSIM will recommend to CSTB the lowest cost share class for which the collective trust fund is eligible.

CSIM has a conflict of interest because it selects or makes recommendations with respect to the selection of Registered Funds, including CSIM managed Registered Funds, for various SMA Strategies client accounts, certain Registered Funds it manages, and for CSTB. Other affiliates of CSIM may buy or sell the same securities for client accounts. CSIM earns compensation from any Registered Funds managed by CSIM held in the SMA Strategies. In addition, CS&Co. receives compensation from mutual funds and ETFs held in SMA Strategies accounts. CS&Co. may enter into relationships with mutual fund and ETF sponsors and receive marketing and promotional compensation from such sponsors for customer shares of such sponsors’ mutual funds and ETFs (collectively, “Strategic Provider Funds”) custodied at CS&Co. As a result, CS&Co. may receive additional compensation for the use of Strategic Provider Funds in the SMA Strategies and model portfolios provided by CSIM. This compensation is in addition to the explicit asset-based fee that SMA Strategies clients pay to CS&Co. or CSIM. These are all inherent conflicts

When recommending that SMA Strategies client accounts invest in Registered Funds with multiple share classes, CSIM will recommend that such client accounts invest in the lowest cost share class for which the client accounts are eligible. As noted above, the fees CSIM receives from the SMA Strategies will be adjusted relative to the CSIM managed Registered Funds for retirement accounts, including IRAs and accounts subject to ERISA for client accounts custodied at CS&Co. CS&Co., a related person of CSIM, is a registered brokerdealer that effects securities transactions for its brokerage customers. CS&Co. may act as a principal or agent in these transactions. In the normal course of the conduct of its business as a broker-dealer, CS&Co. may

enter into purchase and sale transactions in securities that CSIM has recommended to its clients.

Generally, for equity and multi-asset SMA Strategies, Registered Funds and collective trust funds, CSIM has separate portfolio management teams and a joint trading group (the “Trading Group”). For certain multi-asset Registered Funds, the portfolio managers conduct the trades. For fixed income SMA Strategies and Registered Funds, both portfolio managers and traders conduct the trades. Each SMA Strategy, Registered Fund, and/or collective trust fund has its designated portfolio management team. The Trading Group supports multiple portfolio management teams. Generally, the Trading Group trades the products and strategies for which it is designated and each portfolio management team provides advice to the products and strategies for which it is designated. However, the Trading Group or a portfolio management team may provide services to products and strategies for which it is not designated. For example, a portfolio management team may determine to use the Trading Group or another portfolio management team that specializes in a particular segment of the financial markets to provide trading services and/or portfolio management for that segment of the financial market within its designated product or strategy. In addition, the head of the Trading Group or a portfolio management team has discretion to assign the necessary personnel to trade and/or provide investment advice for a specific product or strategy.

CSC, CS&Co. and CSTB may invest for the benefit of their own accounts in the same securities that CSIM recommends to its clients. From time to time CSIM maintains test brokerage accounts (“test accounts”) to facilitate operational matters. These affiliates and CSIM test accounts may buy or sell securities at the same time that CSIM clients are buying or selling the same security and may take positions that are the same or contrary to one that CSIM has recommended. In addition, directors, officers and employees of CSIM may buy or sell for themselves (through personal accounts or through accounts of which they are direct or indirect beneficiaries) securities that are also recommended to, or purchased or sold on behalf of, clients.

Personal Trading CSIM and its affiliates have established policies and procedures designed to prevent the exchange of information between employees at each organization relating to securities holdings and possible trades. Additionally, the personal securities transactions of CSIM’s access persons are subject to the Code, which is designed to detect and mitigate or prevent conflicts of interest and unlawful practices that may arise in connection with an access person’s personal securities transactions. For example, as described above, the Code requires periodic reporting and review of personal securities transactions and securities holdings. Furthermore, the Code requires access persons to obtain prior approval from the compliance department prior to engaging in a security transaction except for certain types of transactions deemed not to present conflicts of interest with CSIM’s advisory activities on behalf of its clients (“Exempted Transactions”), such as purchases pursuant to an automatic investment plan. Access persons are restricted from executing personal transactions in securities, except for Exempted Transactions, when they know or should have known at the time that there is a pending “buy” or “sell” order in the same security for any client account. Portfolio managers are subject to a blackout period of seven calendar days for both when a security is traded, or is expected to be traded on behalf of a client account and after a security has been traded on behalf of a client. In addition, certain access persons are prohibited from realizing a profit from purchasing and selling, or selling and purchasing, the same security on a short term basis. All access persons are also prohibited from executing a personal transaction in securities when the access person has material non-public information regarding the security or issuer. Certain personal transactions in securities may be subject to further review by CSIM’s CCO or their designee.

CSIM has established informational barriers and procedures that seek to prohibit personnel from communicating or distributing any non-public information related to the trading activities of a product or strategy such personnel support (including information regarding pending orders for clients) to other CSIM personnel that should not be privy to such information. When CSIM personnel are part of separate portfolio management teams, on the Trading Group or trade for products and strategies for which they are not designated, CSIM has adopted procedures governing such trading activities to seek to ensure such CSIM personnel are not communicating or distributing any non-public information related to their trading activities of a product or strategy (including information regarding pending orders for clients) to personnel on the Trading Group or a portfolio management team that are not involved in trading for and management of that product or strategy or utilize such non-public information among products or strategies in a manner that is not consistent with policies and procedures. The Trading Group and each portfolio management team seeks to obtain best execution on orders it originates that are not directed brokerage; however, clients serviced by the Trading Group or different portfolio management teams could receive or appear to receive more favorable outcomes.

Generally, the Trading Group or a portfolio management team will aggregate and allocate orders only among those clients that it services and independently of each other. However, at times a portfolio management team that trades for client accounts for which it is not designated as the portfolio management team may aggregate trades for those client accounts with trades for client accounts for which it is designated as the portfolio management team only if it is in the best interests of one or more clients to execute their trades on an aggregated basis.

Funds advised by CSIM or the receipt of client referrals as a factor in selecting a broker to effect a portfolio transaction; however, CSIM can execute through brokers that sell shares of Registered Funds advised by CSIM or provide client referrals. In addition, CSIM can execute through Authorized Participants (institutional investors who have entered into an authorized participant agreement with the Schwab ETFs) for the Schwab ETFs or through Authorized Participants’ affiliated brokerdealers. CSIM can place orders directly with ATSs. Placing orders with ATSs could enable clients to trade directly with other institutional holders. At times, this allows clients to trade larger blocks at more favorable prices than would be possible trading through another market venue.

Selecting or Recommending Broker-Dealers CSIM is responsible for selecting brokers or dealers to execute transactions for client accounts, except for client accounts with a directed brokerage agreement and assets under the management of sub-advisers. For more information about directed brokerage see the “Directed Brokerage” section. The sub-advisers that are responsible for recommending brokers or dealers are subject to the general oversight of CSIM and, with respect to CSTB, CSIM provides assistance to CSTB with respect to policies and procedures for selecting and monitoring collective trust fund brokers.

In determining when and to what extent to use CS&Co. or any other affiliated broker-dealer as a broker for executing orders for clients, CSIM follows procedures that are designed to assure that affiliated brokerage commissions (if relevant) are reasonable and fair in comparison to unaffiliated brokerage commissions for comparable transactions. Additional information about CSIM’s brokerage practices with respect to the Registered Funds and Private Funds is included in their respective offering documents.

CSIM seeks best execution for its clients’ portfolio transactions that are not directed brokerage. CSIM places trades in various manners including through different broker/dealers, agency brokers, principal marketmaking dealers, smaller brokers and dealers, which may specialize in particular regions or asset classes, futures commission merchants and over-thecounter derivatives dealers (each, a “broker” for purposes of the discussion in this section). CSIM also uses electronic trading methods, including alternative trading systems (“ATSs”). CSIM evaluates the quality and cost of services received from broker-dealers on a periodic and systematic basis and considers a number of factors in selecting brokers or dealers to execute these transactions. These factors can include, without limitation, the following: execution price; transaction fees inclusive of commissions, mark-ups and mark-downs, dealer spread and other brokerage fees; size or type of the transaction; nature or character of the markets; clearance or settlement capability; reputation; financial strength and stability of the broker or dealer; promptness, reliability and efficiency of execution related services and error resolution; accuracy of trades; block trading capabilities; ability to execute trades in difficult market conditions; ability to source liquidity; willingness to use balance sheet; confidentiality; and provision of additional brokerage or research services or products. In seeking best execution, CSIM considers whether the transaction represents the best qualitative and quantitative execution under the circumstances, which is not solely determined by the lowest brokerage fee available. CSIM does not consider sales of Registered

Soft Dollars CSIM generally will not enter into formal soft-dollar arrangements with brokers or third parties to obtain brokerage or research services in exchange for brokerage commissions paid by advised accounts. However, CSIM does receive various forms of eligible proprietary research that is bundled with brokerage services at no additional cost from certain of the brokers with whom CSIM executes equity or fixed income trades. These include brokers CSIM is affiliated with such as CS&Co. or from participation in Broker/Custodian-Related Programs for certain separately managed account strategies. These services or products can typically include: company financial data and economic data (e.g., unemployment, inflation rates and GDP figures), stock quotes, last sale prices and trading volumes, research reports analyzing the performance of a particular company or stock, access to websites that contain data about various securities markets, narrowly distributed trade magazines or technical journals covering specific industries, products, or issuers, seminars or conferences registration fees which provide substantive content relating to eligible research, discussions with research analysts or meetings with corporate executives which provide a means of obtaining oral advice on securities, markets or particular issuers, short-term custody related to effecting particular transactions and clearance and settlement of those trades, lines between the brokerdealer and order management systems operated by a

third party vendor, dedicated lines between the brokerdealer and CSIM’s order and execution management system, dedicated lines providing direct dial-up service between CSIM and the trading desk at the broker-dealer, and message services used to transmit orders to brokerdealers for execution. CSIM can use research services furnished by brokers or dealers in servicing all client accounts, and not all services will necessarily be used in connection with the account that paid commissions or spreads to the broker or dealer providing such services.

Clients in the SIP Program, SMP Program, and certain custom investment mandates agree in their account agreements with CS&Co. or their investment management agreement with CSIM, as applicable, that all brokerage transactions for equity securities will be executed by CS&Co. SMA clients of CSTC, other than those invested in ThomasPartners Strategies and Wasmer Schroeder Strategies, agree in their account agreements with CSTC that all brokerage transactions for equity securities will be executed by CS&Co. As a result, a client might not always obtain as favorable a price or execution as could have been available through another broker-dealer. Directed brokerage arrangement monitoring and trading are subject to systems and technology constraints and availability and, while unlikely, may not take place daily. Not all broker-dealers or investment advisers require their clients to direct trades to a particular broker-dealer (also known as “directed brokerage”).

Although CSIM does not have arrangements to cause a client to pay higher commissions to obtain soft dollar benefits, CSIM benefits from its receipt of bundled research because it does not have to produce or pay for the research, products or services. Consequently, CSIM has an incentive to select or recommend a broker-dealer based on its interest in receiving the proprietary research or other products or services. CSIM will sometimes purchase for clients new issues of securities in a fixed price offering. In these situations, the seller may be a member of the selling group that will, in addition to selling securities, provide CSIM with research services, in accordance with applicable rules and regulations permitting these types of arrangements. Generally, the seller will provide research “credits” in these situations at a rate that is higher than that which is available for typical secondary market transactions.

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Compensation

SMA Strategies on Schwab Managed Account Programs

Certain employees of CSIM’s affiliates are compensated based on net sales in Registered Funds and SMA Strategies managed by CSIM and in the CSTB collective trust funds for which CSIM provides non-discretionary investment management advice. Certain employees of CSIM’s affiliates may earn additional incentive compensation by referring clients to certain SMA Strategies. Consequently, these employees may have an incentive to recommend CSIM advised Registered Funds and SMA Strategies and CSTB collective trust funds over other types of accounts.

CSIM’s portfolio managers review, on an ongoing basis, the performance of SMA Strategies on the Schwab Managed Account Programs against their applicable benchmarks. CS&Co. contacts clients on an ongoing basis, including for SIP Program through electronic channels, to determine whether there have been any changes in their financial situation or investment objectives and whether clients wish to impose any reasonable restrictions on the management of their accounts or reasonably modify existing restrictions. SIP Program clients may update their investment profile online at any time. CS&Co. communicates the information obtained from clients to CSIM as necessary for the management of the account.

CSIM does not make payments to its representatives or those of its affiliates for referring clients to Schwab Wealth Portfolios, Selective Portfolios, SGP, SIP Program, and SMP Program.

SWAI representatives contact clients participating in Schwab Wealth Portfolios on a periodic basis to determine whether there have been any changes in their financial situation or investment objectives and whether clients wish to impose any reasonable restrictions on the management of their accounts or reasonably modify existing restrictions. SWAI representatives coordinate with CS&Co. to communicate the information obtained from clients to CSIM as necessary for the management of the account.

CSIM may recommend that ThomasPartners Strategies, Wasmer Schroeder Strategies, and Windhaven Strategies clients establish brokerage accounts with CS&Co., an affiliate registered broker-dealer, to maintain custody of clients’ assets and to effect trades for their accounts. CS&Co. provides CSIM, its affiliate, with access to its institutional trading and operations services, which are typically not available to CS&Co. clients. CS&Co.’s services include research, brokerage, custody, and access to mutual funds and other investments that are otherwise available only to institutional investors or would require a significantly higher minimum initial investment. CS&Co. also makes available to CSIM other products and services that benefit CSIM but may not benefit clients’ accounts. Some of these other products and services assist CSIM in managing and administering clients’ accounts. These include software and other technology that provide access to client account data (such as trade confirmations and account statements);

SPI, ThomasPartners Strategies, Wasmer Schroeder Strategies, and Windhaven Strategies Direct Client accounts are reviewed on an ongoing basis. The reviews are performed by Relationship Managers and/or the Client Service team members and generally focus on the client’s personal financial situation, liquidity needs, and comfort with risk level; a review of account restrictions; an overview of the client’s current portfolio; and any questions the client may have on their accounts

facilitate trade execution (and allocation of aggregated trade orders for multiple client accounts); provide research, pricing information, and other market data; facilitate payment of CSIM’s fees from its clients’ accounts in SPI, ThomasPartners Strategies, Wasmer Schroeder Strategies, and Windhaven Strategies; and assist with back-office support, recordkeeping, and client reporting. Many of these services generally may be used to service all or a substantial number of the SMA Strategies client accounts, including accounts not maintained at CS&Co.

• assistance with back-office functions, recordkeeping, and program client reporting; • discounts on compliance, marketing, research, technology, and practice management products; • compliance, legal and business consulting; publications and conferences on practice management and business succession; and • access to employee benefits providers, human capital consultants and insurance providers

CS&Co. may also provide CSIM with other services intended to help CSIM manage and further develop its business. These services may include consulting, publications and presentations on practice management, information technology, business succession, regulatory compliance, and marketing. In addition, CS&Co. may make available, arrange, and/or pay for these types of services to CSIM by independent third parties. CS&Co. may discount or waive fees it would otherwise charge for some of these services or pay all or a part of the fees of a third party providing these services to CSIM.

Some of the products and services made available by these custodians through their program benefit program clients; some products and services may benefit CSIM but not the clients. These products or services may assist CSIM in managing and administering client accounts, including accounts not maintained at the custodian. As part of its fiduciary duties to clients, CSIM strives at all times to put the interests of its clients first. These benefits and services may be useful for all client accounts. Although we recommend that clients establish accounts with specific custodians, it is the client’s decision to determine the custodian to custody their assets. As a result of receiving benefits and such services for no additional cost, we may have an incentive to continue to use or expand the use of the custodians’ services. We examined this potential conflict of interest when we chose to enter into the relationships and periodically review such conflicts and have determined that these arrangements are in the best interests of CSIM’s clients and satisfy our client obligations, including our duty to seek best execution.

Other Broker/Custodian-Related Programs For certain SMA Strategies, CSIM participates in a number of Broker/ Custodian-Related Programs sponsored by unaffiliated firms. These Broker/CustodianRelated Programs and their affiliates provide CSIM with certain economic benefits and access to products and services not typically available to retail clients as a result of CSIM’s participation in their programs. These benefits may include the following products and services: • access to client account data (such as program client statements and trade confirmations);

Client Referrals from Solicitors CSIM may contract with independent solicitors (also known as promoters) and its affiliate, CS&Co. (and/or CS&Co. affiliates), to obtain new ThomasPartners Strategies, Wasmer Schroeder Strategies, and Windhaven Strategies clients. Client fees are generally not higher than CSIM’s standard Wasmer Schroeder Strategies’ fees or Windhaven Strategies fees because of payments to a solicitor. CSIM currently has two arrangements where terminated solicitors are paid an ongoing fee for client referrals, one for ThomasPartners Strategies and one for Wasmer Schroeder Strategies. No new clients are referred under these terminated solicitation arrangements. For one solicitor arrangement, client fees in the majority of these accounts are higher than the ThomasPartners Strategy standard fee because of payments to this solicitor.

• research, pricing and other market data; • equity trade fee waivers; • consulting services; • access to a trading desk serving program clients; • facilitation of trade execution and access to block trading (which provides the ability to bundle securities transactions for execution and then allocate the appropriate shares to program client accounts); • the ability to have advisory fees deducted directly from program client accounts; • access to an electronic communications network for client order entry and account information;

Some solicitors may require CSIM to meet certain minimum participation criteria, or may select CSIM as a result of its other business relationships with the solicitor and its affiliates. As a result, CSIM may have a conflict of interest in using or recommending the solicitor or its

• access to mutual funds with no transaction fees and to certain institutional money managers;

affiliates to provide services such as brokerage and custody to its advisory clients.

account statements detailing account positions and activities during the preceding period. A portion of ThomasPartners Strategies, Wasmer Schroeder Strategies, and Windhaven Strategies client accounts are held in custody by unaffiliated broker-dealers or banks. These unaffiliated broker-dealers or banks will also send client account statements on at least a quarterly basis. SPI, ThomasPartners Strategies, Wasmer Schroeder Strategies, and Windhaven Strategies clients should carefully review these statements, and should compare these statements to any account information provided by CSIM, as the information provided in CSIM’s quarterly reports for Direct Clients may vary based on accounting procedures, reporting dates, or valuation methodologies. ThomasPartners Strategies, Wasmer Schroeder Strategies, and Windhaven Strategies clients may elect to custody their accounts at any custodian of their choosing, subject to the acceptance of CSIM. However, the selection of a custodian may or may not put a client at a disadvantage for obtaining best execution for their trades.

Fidelity Wealth Advisor Solutions CSIM participates in the Fidelity Wealth Advisor Solutions® program (the “WAS Program”), through which CSIM receives Wasmer Schroeder Strategies referrals from Fidelity Personal and Workplace Advisors LLC (“FPWA”), a registered investment adviser and indirect wholly owned subsidiary of FMR LLC, the parent company of Fidelity Investments. CSIM is independent and not affiliated with FPWA or FMR LLC. FPWA does not supervise or control CSIM, and FPWA has no responsibility or oversight of CSIM’s provision of Wasmer Schroeder Strategies portfolio management or other advisory services. Currently, CSIM does not receive any new referrals in the program. CSIM continues to pay referral fees to FPWA for referrals previously received based on CSIM’s assets under management attributable to each client referred by FPWA or members of each client’s household. These referral fees are paid by CSIM and not the client.

CSIM may directly deduct advisory fees from SPI, ThomasPartners Strategies, Wasmer Schroeder Strategies, and Windhaven Strategies client accounts based on the specific arrangement with each client. As part of this billing process, the client’s custodian is advised of the amount of the fee to be deducted from that client’s account. On at least a quarterly basis, the custodian is required to send to the client a statement showing all transactions within the account during the reporting period. Because the custodian does not calculate the amount of the fee to be deducted, it is important for clients to carefully review their custodial statements to verify the accuracy of the calculation, among other things. Clients should contact us directly if they believe that there may be an error in their statement.

CSIM also receives ThomasPartners Strategy referrals through the WAS Program from Strategic Advisers, Inc. (“SAI”), a registered investment adviser and subsidiary of FMR LLC. CSIM is independent and not affiliated with SAI or FMR LLC. SAI does not supervise or control CSIM, and SAI has no responsibility or oversight of CSIM’s provision of ThomasPartners Strategies portfolio management or other advisory services. There are two versions of this program, referral fee based and nonreferral fee based. Currently, CSIM has no ThomasPartners Strategies clients in the referral feebased program and does not receive any new referrals in either program.

Model Portfolios

CSIM periodically reviews client accounts, including Registered Funds, utilizing product-specific review processes. Accordingly, account review may differ across client and product types. CSIM’s portfolio managers are generally responsible for the daily management and review of the client accounts under their supervision. Such reviews may examine compliance with client’s investment objectives and account guidelines, account performance, and CSIM’s current investment process and practices, as applicable. Below are more detailed descriptions of account reviews conducted by CSIM.

In non-discretionary model portfolio arrangements with unaffiliated Sponsors, including custom model portfolios, CSIM is ultimately not responsible for determining which securities to buy or sell and is not responsible for executing such trades. For Wasmer Schroeder Strategies model portfolio arrangements CSIM is responsible for determining which securities to buy or sell and is not responsible for executing such trades. CSIM also provides non-discretionary model portfolios to its affiliate, CSTC. CSTC is responsible for determining the models to be used for trust assets and has the ultimate decision making and discretionary responsibility for the determination of which securities are to be purchased

Collective Trust Funds

and strategies. For clients who establish and maintain their relationship through their Primary Advisor, subadviser or Wrap Fee Program sponsor, account reviews would typically be performed by personnel of the Primary Advisor, sub-adviser or Wrap Fee Program sponsor. Reviews of accounts custodied at CS&Co. may be assisted by CS&Co. personnel, as applicable. Direct Clients generally receive quarterly written reports, which include the client’s investment positions and the performance of their account(s). This is in addition to the monthly and quarterly statements from custodians and Primary Advisors and confirmations of transactions that clients receive from various broker-dealers. For certain sub-advised relationships, CSIM may send client statements and other materials to the Primary Adviser in the client relationship or directly to the client.

A team of investment professionals are responsible for overseeing the sub-advisers to and underlying pooled investment vehicles held by collective trust funds, which are maintained by CSTB. The team monitors each collective trust fund for asset allocation, sub-adviser and underlying pooled investment vehicles performance, and sub-adviser exposure as compared to the fund’s guidelines on a daily basis, with additional meetings or reviews on monthly basis. CSIM meets with CSTB at least quarterly to review sub-adviser performance, provide updates relating to general economic conditions and matters related to the collective trust funds and to recommend changes when deemed appropriate. CSIM also performs reviews on an as needed basis, including review of a new asset class or sub-adviser searches.

With respect to the Registered Funds and collective trust funds, CSIM generally does not maintain physical custody of its clients’ assets. Client assets are typically held by a qualified custodian pursuant to a separate custody agreement.

CSIM has investment discretion over the Registered Funds pursuant to investment management/advisory agreements between the Registered Funds and CSIM. As described in the Advisory Business section, CSIM manages the Registered Funds and Private Funds in accordance with their respective offering documents. The Registered Funds’ boards of trustees and applicable law may also place additional restrictions on CSIM’s investment discretion.

Clients use CS&Co. as custodian for their Schwab Wealth Portfolios (including those account portions invested in SMA strategies), Selective Portfolios, SGP, SMP Program, SIP Program, and SPI accounts. CS&Co., on at least a quarterly basis, will send clients account statements detailing account positions and activities during the preceding period. Clients should review these statements carefully.

When clients choose the SMA Strategies they sign the custodian’s applicable new account paperwork giving CSIM authorization to make trades in their account. This investment management discretion is limited to the purchase and sale of securities and investment of cash, and does not include discretion for distributions of cash or securities (except for limited grants of authority to

For those SPI, ThomasPartners Strategies, Wasmer Schroeder Strategies, and Windhaven Strategies clients that have CS&Co. as custodian for their account, CS&Co., on at least a quarterly basis, will send client

facilitate withdrawal of money and direct payments to third parties according to clients’ instructions). Clients may impose reasonable restrictions on the management of their account, subject to the acceptance of CSIM. SPI clients can request to restrict one or more individual securities and/or industries, subject to the acceptance of CSIM. For the Schwab Managed Account Programs, clients in ThomasPartners Strategies and Windhaven Strategies can request to restrict up to three ticker symbols in total. Clients in Wasmer Schroeder Strategies in the Schwab Managed Account Programs can request to restrict up to three issuers. Direct Clients in SPI, ThomasPartners Strategies, Wasmer Schroeder Strategies, and Windhaven Strategies have the ability to request restrictions to their accounts beyond those restrictions available to Schwab Managed Account Platform clients subject to acceptance by CSIM.

requests. CSIM reserves the right to not accept certain restrictions. After an account is opened, should a client make changes to their imposed restrictions, and CSIM believes it no longer can manage the client’s account effectively, CSIM may elect to terminate the account. Subject to meeting minimum security gain/loss thresholds and CSIM’s approval, CSIM can accommodate client requested tax gain/loss harvesting for certain SMA Strategies. CSIM reserves the right to decline the request. See the “Tax and Tax Gain/Loss Harvesting Risks” section for more details on the risks associated with client requested tax gain/loss harvesting for these SMA Strategies.

The following is a summary of CSIM’s Proxy Voting Policy (the “Proxy Voting Policy”) concerning proxies voted by CSIM on behalf of each investment advisory client who delegates voting authority to CSIM (“Delegating Client”). The Proxy Voting Policy may be changed as necessary to comply with regulatory requirements and internal policies and procedures. An internal proxy committee (the “Proxy Committee”) exercises and documents CSIM’s responsibility with regard to voting of client proxies, including the review and approval of the Proxy Voting Policy.

The investment restrictions that clients in Schwab Wealth Portfolios may impose depend on the strategy selected by the client for their account. Schwab Wealth Portfolios clients should contact their SWAI representatives to determine the types of investment restrictions they may impose. Clients invested in SGP can request to restrict up to three ticker symbols in total (mutual funds and ETFs combined) in each SGP account. Mutual funds and ETFs designated for restriction by clients will be replaced with alternatives selected by CSIM.

To assist CSIM in its responsibility for voting proxies and the overall proxy voting process, CSIM has retained proxy advisers. The services provided by the proxy adviser include global issuer research and analysis, as well as a voting platform used to submit votes, reporting and record keeping. The proxy adviser also provides research and analysis on certain topics and CSIM may retain additional experts in the proxy voting, corporate governance and other areas of material risk in the future.

Clients invested in the SIP Program can request to restrict up to three ETFs (limited to one per asset class) in each account. ETFs designated for restriction by clients will be replaced with alternatives selected by CSIM. CSIM does not permit clients to restrict ETFs in asset classes where there are no alternatives. If an asset class has only one ETF available for investment (due to client restrictions or otherwise), the client will forego the opportunity for tax-loss harvesting from the asset class. Clients invested in SMP-ETF, Selective Portfolios Core ETF, and Selective Portfolios Opportunistic, can request to restrict up to three ETFs in each account. Clients invested in SMP-MF and Selective Portfolios Core Mutual Fund may restrict up to three mutual funds in each account. Mutual funds and ETFs designated for restriction by clients will be replaced with alternatives selected by CSIM.

The Proxy Committee has the ultimate responsibility for developing the Proxy Voting Policy to determine how to vote the shares. CSIM’s Investment Stewardship Team has the primary responsibility to oversee that voting is carried out consistent with the Proxy Voting Policy. The Investment Stewardship Team also conducts research into proxy issues and carries out engagement activities with companies. The Proxy Committee receives reports from the Investment Stewardship Team on these activities on a regular basis.

Accounts with investment restrictions may perform differently than accounts without restrictions; performance may be lower or higher for accounts with restrictions than for those without restrictions. The performance of your account may be different than CSIM’s performance composite if your account has restrictions. In addition, your account’s performance may be different than its relevant composite due to client generated activity such as fund withdrawal or deposit

As a leading asset manager, it is CSIM’s responsibility to use its proxy votes to encourage transparency, corporate governance structures and the management of material risks that it believes protect and promote shareholder value. CSIM takes a long-term, measured approach to investment stewardship. CSIM’s client-first philosophy drives all of its efforts, including its approach to decision making. In the investment stewardship context, that unfolds through CSIM’s efforts to appropriately manage

risk by encouraging transparency and focusing on corporate governance structures that will help protect and promote shareholder value. Therefore, CSIM’s focus on maximizing long-term shareholder value includes consideration of potential environmental and social impacts that we believe are relevant to individual companies. In general, CSIM believes corporate directors, as the elected representatives of all shareholders, are best positioned to oversee the management of their companies. Accordingly, CSIM typically supports a board of directors’ and management’s recommendations on proxy matters. However, CSIM will vote against management’s recommendations when it believes doing so will protect or promote long-term shareholder value.

compensation plans, employee stock purchase plans, reprice/ exchange option plans, compensation-related shareholder proposals, shareholder rights plans, right to call special meetings, right to act by written consent, supermajority voting, increase in authorized common shares, preferred shares, mergers and acquisitions, and environmental and social shareholder proposals.

CSIM invests on behalf of its clients in companies domiciled all over the world. Since corporate governance standards and best practices differ by country and jurisdiction, the market context is taken into account in the analysis of proposals. Furthermore, there are instances where CSIM may determine that voting is not in the best interests of its Delegating Clients (typically due to costs or to trading restrictions) and will refrain from submitting votes.

With respect to proxies of an underlying Registered Fund managed by CSIM, the Investment Stewardship Team will ensure that such proxies are “echo voted”, unless otherwise required by law. When required by law or applicable exemptive order, the Investment Stewardship Team will also ensure the “echo voting” of an unaffiliated mutual fund or exchange traded fund. In addition, with respect to holdings of CSC, the Investment Stewardship Team will ensure such proxies are echo-voted, unless otherwise required by law.

CSIM maintains the following practices that seek to prevent undue influence on its proxy voting activity. Such influence might arise from any relationship between the company holding the proxy (or any shareholder or board member of the company) and CSIM, CSIM’s affiliates, a Registered Fund managed by CSIM or its affiliate, a client or client’s affiliate, or a CSIM employee.

As part of CSIM’s regular proxy voting guideline development and updating process, the Proxy Committee reviews CSIM’s proxy voting guidelines with input from the Investment Stewardship Team at least annually and evaluates them in light of the long-term best interests of shareholders. CSIM utilizes its own Proxy Voting Guidelines to vote, which include using discretion when deciding how to vote on a number of different issues. For U.S. companies, contested director elections, “vote no” campaigns, mergers and acquisitions, some executive compensation and election of director proposals, changes to state of incorporation, and many shareholder proposals, including environmental, social and governance-related proposals, are voted on a case-bycase basis by the Investment Stewardship Team.

Where the Proxy Committee has delegated an item to the Investment Stewardship Team, CSIM has taken certain steps to mitigate perceived or potential conflicts of interest, including, but not limited to, the following: (i) maintaining a reporting structure that separates employees with voting authority from those with sales or business relationship authority; (ii) reporting of potential conflicts to the Proxy Committee to review the conflict and provide final vote determination; and (iii) defaulting to the standard CSIM Proxy Voting Policy. In all other cases, proxy issues that present material conflicts of interest between CSIM and/or any of its affiliates, and CSIM’s clients, will be delegated to the Service to be voted in accordance with CSIM’s proxy voting guidelines which are set each year based on governance criteria and not influenced by any individual issuer or ballot item.

While the CSIM Proxy Voting Policy is in place to provide structure and guidance and ensure CSIM’s approach is consistent and repeatable, CSIM recognizes instances may arise that would benefit from additional research and analysis to determine CSIM’s policy recommendation. As such, CSIM reserves the right to use discretion and apply a case-by-case approach when determining its vote decision for any proposal that it believes warrants added scrutiny by the Investment Stewardship Team.

Voting proxies with respect to shares of foreign securities may involve significantly greater effort and corresponding cost than voting proxies with respect to domestic securities due to the variety of regulatory schemes and corporate practices in foreign countries with respect to proxy voting. In consideration of the foregoing issues, the Service uses its best efforts to vote foreign proxies. As part of its ongoing oversight, the Proxy Committee will monitor the voting of foreign proxies to determine whether all reasonable steps are taken to vote foreign proxies. If the Proxy Committee determines that the cost associated with the attempt to vote outweighs the potential benefits Delegating Clients may derive from

CSIM has adopted proxy voting principles addressing common proxy voting issues including: election of directors, ratification of auditors, contested director elections, classified boards, majority voting, proxy access, separation of chair and CEO role, independent chair, executive compensation and frequency, equity

voting, the Proxy Committee may decide not to attempt to vote. In addition, certain foreign countries impose restrictions on the sale of securities for a period of time before and/or after the shareholder meeting. To avoid these trading restrictions, the Proxy Committee instructs the Service not to vote such foreign proxies (shareblocking). Where CSIM has delegated day-to-day investment management responsibilities for a client account to a sub-adviser, CSIM may (but generally does not) delegate proxy voting responsibility to such sub-adviser. Each sub-adviser to whom proxy voting responsibility has been delegated will be required to review all proxy solicitation material and to make voting decisions in the best interest of each investment company and its shareholders, or other client associated with the securities it has been allocated. Each sub-adviser to whom proxy voting has been delegated must inform CSIM of its voting decisions to allow CSIM to implement the votes or in the case of shared voting responsibility, potentially override the subadviser’s vote recommendation. Prior to delegating the proxy voting responsibility, CSIM will review each subadviser’s proxy voting policy to determine whether it believes that each sub-adviser’s proxy voting policy is generally consistent with the maximization of the value of CSIM’s clients’ investments by protecting the long term best interest of a company’s shareholders. Delegating Clients may not direct voting in a particular solicitation. Clients in the SMA Strategies wishing to retain the ability to vote proxies must submit a separate form to their custodian. Additional information about CSIM’s proxy voting practices with respect to the Registered Funds is included in their respective prospectuses and statements of additional information. A client may obtain a copy of CSIM’s Proxy Voting Policy, or information regarding how his or her securities were voted, by calling CSIM at (800) 650-9744.

CSIM does not require nor solicit prepayment of investment advisory fees in excess of $1,200 more than six months in advance of services rendered from its clients. CSIM is not aware of any financial condition that is reasonably likely to impair its ability to meet its contractual commitments to clients, nor has CSIM been the subject of a bankruptcy petition at any time during the past ten years.