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Schwab Declines 3% as July Net New Assets Fall Sequentially

Zacks Equity Research

Shares of Charles Schwab SCHW have declined 3% following the release of its monthly activity report for July 2019. Net new assets of $19.3 billion declined 4% from the prior month. Nonetheless, it grew 18% year over year.

Total client assets came in at $3.7 trillion, up 1% from the prior month and 8% from the year-ago month. Client assets receiving ongoing advisory services were $1.96 trillion, up 1% sequentially and 8% year over year.  

Schwab’s average interest earning assets were $264 billion at the end of July, relatively on par with June 2019 level and up 4% from July 2018. The company opened 129,000 new brokerage accounts in the reported month, up 11% sequentially and 9% year over year.

Schwab’s active brokerage accounts totaled 12 million at the end of July, relatively stable sequentially, and up 7% from the year-ago month. Further, client’s banking accounts were 1.4 million, rising 1% from June 2019 and 7% from July 2018. The number of retirement plan participants were in line with the prior-month level and up 6% year over year at 1.7 million.

Shares of Schwab have lost 15.3% over the past three months compared with 9.4% decline for the industry it belongs to.

Schwab currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Investment Brokers

E*TRADE Financial’s ETFC Daily Average Revenue Trades (DARTs) for July were 255,423, up 1% from the previous month and 5% year over year. Derivatives comprised 35% of DARTs in July.

Interactive Brokers Group, Inc. IBKR released its Electronic Brokerage segment’s performance metrics for July. The segment, which deals with the clearance and settlement of trades for individual and institutional clients globally, reported a sequential decrease in DARTs. Total client DARTs were 800,000, down 1% from the prior month.

Upcoming Release

LPL Financial Holdings LPLA is likely to report monthly activity for July soon.

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