Schwab Reports Monthly Activity Highlights

Nachrichtenquelle: Business Wire (engl.)
15.09.2020, 14:45  |  122   |   |   

The Charles Schwab Corporation released its Monthly Activity Report today. Company highlights for the month of August 2020 include:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20200915005363/en/

  • Core net new assets brought to the company by new and existing clients totaled $20.0 billion. Net new assets excluding mutual fund clearing totaled $19.3 billion.
  • Total client assets were $4.49 trillion as of month-end August, up 21% from August 2019 and up 5% compared to July 2020.
  • Client cash as a percentage of assets was 12.5% as of month-end August, compared with 11.3% in August 2019 and 13.0% in July 2020.

CFO Peter Crawford commented, “We continue to drive strong business momentum; August new accounts and core net new assets were among the highest we’ve seen for a summer month in recent years, and client assets reached a record $4.49 trillion at month-end, up $773 billion, or 21%, year-over-year. Thus far in the third quarter, equity market returns have been quite strong and client trading activity very robust relative to prior years. At the same time, continued compression of interest rates has been pressuring investment yields. In addition, while we’ve taken steps to mitigate prepayment risk by reshaping our investment portfolio over recent years to include significantly expanded allocations to less-prepayable securities, the sharp reduction in long-term rates has led to an acceleration of prepayment activity in the mortgage-backed securities held within our investment portfolio. These dynamics are pushing our third quarter net interest margin into the upper 130s basis point range, and therefore our third quarter total net revenues are running slightly lower than the company’s second quarter results.”

Forward-Looking Statements

This press release contains forward-looking statements relating to business momentum; mitigation of prepayment risk in our investment portfolio; and third quarter net interest margin and total net revenues. Achievement of these expectations and objectives is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations.

Important factors that may cause such differences include, but are not limited to, general market conditions, including equity valuations, trading activity, the level of interest rates - which can impact money market fund fee waivers - and credit spreads; the company’s ability to attract and retain clients and registered investment advisors and grow those relationships and client assets; competitive pressures on pricing, including deposit rates; the company’s ability to develop and launch new and enhanced products, services, and capabilities, as well as enhance its infrastructure, in a timely and successful manner; client use of the company’s advisory solutions and other products and services; changes in prepayment levels for mortgage-backed and other asset-backed securities and loans; client cash allocations; client sensitivity to rates; the level of client assets, including cash balances; the company’s ability to monetize client assets; capital and liquidity needs and management; the impact of changes in market conditions on revenues, expenses, and pre-tax profit margin; the company’s ability to manage expenses; the scope and duration of the COVID-19 pandemic and actions taken by governmental authorities to contain the spread of the virus and the economic impact; and other factors set forth in the company’s most recent reports on Form 10-K and Form 10-Q.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 360 offices and 14.3 million active brokerage accounts, 1.7 million corporate retirement plan participants, 1.5 million banking accounts, and $4.5 trillion in client assets as of August 31, 2020. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, https://www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at https://www.schwab.com and https://www.aboutschwab.com.

The Charles Schwab Corporation Monthly Activity Report For August 2020
 

2019

2020

Change

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug Mo. Yr.
Market Indices (at month end)
Dow Jones Industrial Average

26,403

 

26,917

 

27,046

 

28,051

 

28,538

 

28,256

 

25,409

 

21,917

 

24,346

 

25,383

 

25,813

 

26,428

 

28,430

 

8%

8%

Nasdaq Composite

7,963

 

7,999

 

8,292

 

8,665

 

8,973

 

9,151

 

8,567

 

7,700

 

8,890

 

9,490

 

10,059

 

10,745

 

11,775

 

10%

48%

Standard & Poor’s 500

2,926

 

2,977

 

3,038

 

3,141

 

3,231

 

3,226

 

2,954

 

2,585

 

2,912

 

3,044

 

3,100

 

3,271

 

3,500

 

7%

20%

Client Assets (in billions of dollars)
Beginning Client Assets

3,746.7

 

3,716.5

 

3,768.4

 

3,854.6

 

3,942.2

 

4,038.8

 

4,051.6

 

3,862.8

 

3,496.9

 

3,778.3

 

4,009.0

 

4,110.1

 

4,278.0

 

Net New Assets (1)

19.9

 

17.4

 

35.2

 

12.0

 

30.1

 

20.9

 

24.4

 

27.9

 

15.3

 

97.5

 

24.6

 

11.2

 

20.0

 

79%

1%

Net Market (Losses) Gains

(50.1

)

34.5

 

51.0

 

75.6

 

66.5

 

(8.1

)

(213.2

)

(393.8

)

266.1

 

133.2

 

76.5

 

156.7

 

191.7

 

Total Client Assets (at month end)

3,716.5

 

3,768.4

 

3,854.6

 

3,942.2

 

4,038.8

 

4,051.6

 

3,862.8

 

3,496.9

 

3,778.3

 

4,009.0

 

4,110.1

 

4,278.0

 

4,489.7

 

5%

21%

Core Net New Assets (2)

19.9

 

17.4

 

24.1

 

12.0

 

30.1

 

20.9

 

24.4

 

27.9

 

15.3

 

17.6

 

13.7

 

2.7

 

20.0

 

N/M

1%

Receiving Ongoing Advisory Services (at month end)

 

Investor Services

314.2

 

318.5

 

324.6

 

330.8

 

337.1

 

336.8

 

323.2

 

291.5

 

309.9

 

339.8

 

345.2

 

355.6

 

366.8

 

3%

17%

Advisor Services (3)

1,635.7

 

1,659.4

 

1,691.6

 

1,728.2

 

1,769.7

 

1,773.2

 

1,694.0

 

1,531.3

 

1,647.9

 

1,711.7

 

1,747.5

 

1,818.5

 

1,900.5

 

5%

16%

Client Accounts (at month end, in thousands)
Active Brokerage Accounts

12,085

 

12,118

 

12,189

 

12,247

 

12,333

 

12,431

 

12,521

 

12,736

 

12,866

 

14,007

 

14,107

 

14,220

 

14,311

 

1%

18%

Banking Accounts

1,361

 

1,361

 

1,374

 

1,384

 

1,390

 

1,403

 

1,411

 

1,426

 

1,439

 

1,448

 

1,463

 

1,480

 

1,493

 

1%

10%

Corporate Retirement Plan Participants

1,711

 

1,718

 

1,735

 

1,743

 

1,748

 

1,732

 

1,726

 

1,721

 

1,696

 

1,714

 

1,716

 

1,712

 

1,715

 

-

-

Client Activity
New Brokerage Accounts (in thousands) (4)

126

 

108

 

142

 

127

 

164

 

167

 

159

 

283

 

201

 

1,250

 

201

 

206

 

202

 

(2%)

60%

Inbound Calls (in thousands)

1,759

 

1,570

 

1,771

 

1,605

 

1,884

 

1,947

 

1,831

 

2,366

 

1,824

 

1,736

 

2,128

 

2,105

 

2,025

 

(4%)

15%

Web Logins (in thousands)

63,928

 

63,530

 

72,547

 

66,394

 

69,733

 

77,716

 

76,941

 

97,523

 

92,491

 

93,803

 

106,720

 

103,474

 

104,468

 

1%

63%

Client Cash as a Percentage of Client Assets (5)

11.3

%

11.4

%

11.3

%

11.3

%

11.3

%

11.3

%

12.0

%

15.1

%

14.3

%

14.0

%

13.6

%

13.0

%

12.5

%

(50) bp

120 bp

Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) (6, 7) (in millions of dollars)
Large Capitalization Stock

328

 

23

 

900

 

1,406

 

991

 

845

 

(178

)

984

 

(693

)

(768

)

(1,254

)

(2,536

)

(1,422

)

Small / Mid Capitalization Stock

(374

)

(212

)

(458

)

73

 

201

 

(314

)

(531

)

(954

)

151

 

(401

)

(1,063

)

(1,476

)

(441

)

International

(1,390

)

(355

)

340

 

735

 

993

 

1,360

 

132

 

(2,116

)

(2,207

)

(1,953

)

(1,580

)

(773

)

230

 

Specialized

353

 

583

 

618

 

484

 

455

 

762

 

397

 

333

 

2,059

 

1,512

 

1,020

 

1,505

 

906

 

Hybrid

(569

)

(372

)

(202

)

(290

)

(96

)

615

 

(257

)

(4,790

)

(860

)

(518

)

(97

)

(769

)

(124

)

Taxable Bond

2,725

 

2,935

 

2,813

 

2,274

 

4,710

 

5,714

 

3,830

 

(23,142

)

1,642

 

5,469

 

9,215

 

7,314

 

7,680

 

Tax-Free Bond

760

 

593

 

809

 

860

 

1,255

 

1,481

 

1,066

 

(5,229

)

(242

)

805

 

1,710

 

1,297

 

1,648

 

Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (6)

(1,281

)

(573

)

(473

)

(761

)

1,097

 

2,684

 

(565

)

(34,382

)

(3,863

)

(564

)

1,768

 

(147

)

2,568

 

Exchange-Traded Funds (7)

3,114

 

3,768

 

5,293

 

6,303

 

7,412

 

7,779

 

5,024

 

(532

)

3,713

 

4,710

 

6,183

 

4,709

 

5,909

 

Money Market Funds

6,068

 

5,833

 

7,059

 

4,768

 

1,515

 

1,911

 

1,312

 

(1,233

)

8,465

 

4,833

 

(5,673

)

(9,039

)

(5,614

)

Average Interest-Earning Assets (8)
(in millions of dollars)

265,005

 

266,430

 

266,089

 

268,254

 

274,911

 

279,437

 

278,966

 

317,850

 

353,018

 

361,814

 

373,986

 

379,521

 

384,690

 

1%

45%

(1)

July 2020 includes an inflow of $8.5 billion related to the acquisition of Wasmer, Schroeder & Company, LLC. June 2020 includes an inflow of $10.9 billion from a mutual fund clearing services client. May 2020 includes an inflow of $79.9 billion related to the acquisition of the assets of USAA's Investment Management Company. October 2019 includes an inflow of $11.1 billion from a mutual fund clearing services client.

(2)

Net new assets before significant one-time inflows or outflows, such as acquisitions/divestitures or extraordinary flows (generally greater than $10 billion) relating to a specific client. These flows may span multiple reporting periods.

(3)

Excludes Retirement Business Services.

(4)

May 2020 includes 1.1 million new brokerage accounts related to the acquisition of the assets of USAA's Investment Management Company.

(5)

Schwab One, certain cash equivalents, bank deposits and money market fund balances as a percentage of total client assets.

(6)

Represents the principal value of client mutual fund transactions handled by Schwab, including transactions in proprietary funds. Includes institutional funds available only to Investment Managers. Excludes money market fund transactions.

(7)

Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.

(8)

Represents average total interest-earning assets on the company's balance sheet.

N/M - Not meaningful

 

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