Why Charles Schwab Stock Was Among the S&P 500’s Biggest Gains on Wednesday

Shares of Charles Schwab (SCHW) rose Wednesday after the provider of brokerage, banking and other financial services reported significant growth in client assets and new brokerage accounts in July.

The company’s shares were among the biggest gainers on the S&P 500 on Wednesday, rising 4.6% to close at $65.36.

Monthly growth trends

One of the highlights of the firm’s activity last month was the acceleration in asset growth. According to Schwab’s latest monthly activity report, net core assets flowing into the firm reached $29.0 billion in July, more than double the total assets raised in the same month a year ago. These figures include assets acquired by both new and existing Schwab clients.

The growth in new assets helped Schwab deliver gains in total client assets, which stood at $9.57 trillion at the end of July. That represents an increase of 16% year over year and 2% month over month.

The monthly update also included encouraging signs for client growth, as Schwab added 327,000 new brokerage accounts in July. Account additions were up 8% year-over-year and 5% month-over-month.

ETF Innovation and Leadership Development

In addition to solid monthly growth data, Schwab celebrated a milestone this week by launching its first actively managed fixed-income ETF. The Schwab Ultra-Short Income ETF (SCUS), which began trading Tuesday, invests in short-term, investment-grade debt securities with the goal of generating income and preserving capital without sacrificing liquidity.

Charles Schwab is the fifth-largest issuer of ETFs by assets under management (AUM).

The company is also preparing for the arrival of a new CFO. Michael Verdeschi, a former Citigroup (C) executive, is set to take over on October 1, following the retirement of Peter Crawford, who had held the position since 2017.

Stock Performance

Schwab shares hit a 52-week high of just under $80 in mid-May but have come under pressure in recent months. Including gains reported Wednesday after its last monthly update, Schwab shares remain down 3.9% for the year.