Schwab ETF Assets Jump 7% in Q1 on Market Rally

The world's fifth-largest ETF issuer, Charles Schwab Corp.

The Artech Westlake, Texas-based financial services conglomerate, which holds $339.9 billion in 30 exchange-traded funds, saw its ETF assets jump by $22% from the first quarter of last year, an increase that met market analysts' expectations. Aggregate ETF assets, including non-proprietary funds, rose to more than $2 trillion, an increase of $10% from the previous quarter and $28% from the same period last year.

Schwab is the successor to New York-based BlackRock Inc.'s Massachusetts-based company, Schwab reported first quarter net income of $4.7 billion, an increase of 6% from the prior year quarter. the company reported earnings per share of 74 cents, exceeding expectations by one cent.

"The numbers are relatively positive and they continue to benefit from the tail end of the market," said CRFA analyst Michael Elliott. Elliott, who is bullish on Schwab, described the report as "positive," thanks in large part to "strong growth in G&G fees."

Shares of Schwab Corporation jumped nearly 41 TP3T today and have risen 411 TP3T over the past year.Schwab stock is held by 222 ETFs, which together hold 178.1 million shares. The largest allocations areIShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI), holding 5.3%.

Schwab's proprietary ETFs accounted for 17% of the $9.1 trillion in total client assets. the financial report showed that total client assets grew by 9.6% in the first quarter, an increase of 28% over the first quarter of last year.

Elliott said a key microfactor in Schwab's financial performance was total net interest income of $2.3 billion in the quarter, with an average yield of 2.02%, higher than the 1.9% in the fourth quarter but lower than the 2.2% in the same period last year.

This revenue stream, which accounts for about half of the company's total revenue, has been impacted by a gradual shift of funds from low-yield to high-yield cash accounts as interest rates have risen. But Elliott believes the trend is slowing, with cash and cash equivalents stabilizing at $33.8 billion, down from $37 billion a year ago.

"Cash adjustment activity will continue to decelerate," he said.

Permalink | © Copyright 2024etf.com Press validate it