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Charles Schwab Client Assets Nearly Doubled in May

By Eric Volkman - Jun 15, 2021 at 11:11AM

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But peeking under the hood, the month-over-month comparisons aren't so impressive.

May was very fertile for Charles Schwab (SCHW 1.15%), which saw some of its operational and financial metrics grow considerably on a year-over-year basis during the month.

In a monthly update issued yesterday, Schwab announced that its total client assets grew by 84% to $7.4 trillion during the month. Meanwhile, average interest-earning assets rose by 46%.

Much of this was due to the frothiness of the stock market. Across that stretch of time, the Dow Jones Industrial Average, the Nasdaq Composite, and the S&P 500 index all rose by double-digit percentages -- 36%, 45%, and 38%, respectively.

Facade of the Toronto Stock Exchange building.

Image source: Getty Images.

But Schwab's month-over-month comparisons are much less compelling. Total client assets in May crept up only 1% from the April figure, while average interest-earning assets were essentially flat. Both growth rates are more or less in tune with the three indexes within that time period.

In May, exchange-traded funds (ETFs) were a particularly compelling investment option for the brokerage's clients. Net buying activity in the category amounted to nearly $9.9 billion. That was more than double the May 2020 result of $4.7 billion, but didn't come close to April 2021's almost $17.5 billion.

As for equities, net buying amounted to $13.4 billion in May (against net sales of $1.6 billion in the year-ago period, and $13.4 billion in buys the previous month). May bond buying came in at $5.9 billion (versus $6.3 billion a year ago and $8.9 billion in April).

Naturally, as a brokerage, Schwab's trading activity frequently mirrors the popularity of the securities it covers and the markets in which it is involved. Still, the fact that the growth in total assets well outpaced the major market indexes on a year-over-year basis shows that its clients remain enthusiastic about trading, and are happy to continue buying and selling through Schwab.

Charles Schwab is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman owns shares of Charles Schwab. The Motley Fool recommends Charles Schwab. The Motley Fool has a disclosure policy.

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