The Charles Schwab Corporation released its Monthly Activity
Report today. Company highlights for the month of August 2020
include:
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- 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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version on businesswire.com: https://www.businesswire.com/news/home/20200915005363/en/
MEDIA: Mayura Hooper Charles Schwab Phone:
415-667-1525
INVESTORS/ANALYSTS: Rich Fowler Charles Schwab Phone:
415-667-1841
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