Key Takeaways
- Charles Schwab shares moved sharply higher Wednesday after the firm reported strong customer and asset growth in July.
- Monthly achievements included $29 billion in core net new assets and 327,000 new brokerage accounts.
- Schwab also launched its first actively managed fixed-income ETF, which began trading Tuesday.
Charles Schwab (SCHW) shares surged on Wednesday after the provider of brokerage, banking, and other financial services reported healthy gains in client assets and new brokerage accounts during July.
The stock was among the top gainers on the S&P 500 Wednesday, rising 4.6% to close at $65.36.
Monthly Growth Trends
One highlight of the firm’s performance last month was an acceleration in asset growth. According to Schwab’s latest Monthly Activity Report, core net new assets coming into the company reached $29.0 billion in July, more than doubling the asset-gathering total from the same month a year ago. These figures include assets brought in by new as well as existing Schwab clients.
The uptick in new assets helped Schwab achieve gains in total client assets as well, which came in at $9.57 trillion as of the end of July. This equates to an increase of 16% year over year and 2% month over month.
The monthly update also featured upbeat signals in terms of customer growth, as Schwab added 327,000 new brokerage accounts in July. Account additions were up 8% from a year ago and 5% from the prior month.
ETF Innovation and Executive Developments
In addition to the solid monthly growth figures, Schwab celebrated a milestone this week with the launch of its first actively managed fixed-income exchange-traded fund (ETF). The Schwab Ultra-Short Income ETF (SCUS), which began trading on Tuesday, invests in short-term, investment-grade debt securities with the aim of generating income and preserving capital without sacrificing liquidity.
Charles Schwab is the fifth-largest ETF issuer based on assets under management (AUM).
The company is also preparing for the arrival of a new chief financial officer. Michael Verdeschi, a former executive at Citigroup (C), is set to step into the role on Oct. 1, following the retirement of Peter Crawford, who held the position since 2017.
Stock Performance
Schwab shares hit a 52-week high just under $80 in mid-May, but they have come under pressure in recent months. Including the gains posted Wednesday in the wake of the latest monthly update, Schwab stock remains down 3.9% for the year.
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