Schwab's (SCHW) July Metrics Improve Y/Y, Stock Up 1%

Shares of The Charles Schwab Corporation (NYSE:SCHW) gained nearly 1% following the company's monthly activity report for Jul 2016. The monthly metrics reflected an overall improvement in financials.

The total client assets were $2.7 trillion at July end, increasing 5% year over year and 3% sequentially. Client assets receiving ongoing advisory services were $1.35 trillion as of July end, up 6% year over year and 3% from the prior month.

The average interest earning assets were $191.9 billion, as of July end. The figure rose 21% on a year-over-year basis and 2% from the prior month. However, the net new assets, through both existing and new clients, totaled $9 billion, down 8% year over year and 3% sequentially.

Schwab opened 84,000 new brokerage accounts in Jul 2016, decreasing 3% both from the prior-year month and sequentially. On the other hand, the company’s active brokerage accounts totaled $9.99 million as of the end of Jul 2016, compared with $9.63 million in Jul 2015 and $9.98 million in Jun 2016.

The client’s banking accounts as on July end totaled 1.07 million, increasing 6% from the prior-year period and 1% from the previous month. Also, the number of retirement plan participants was 1.56 million, which implies an increase of 5% year over year and almost flat at the preceding-month level.

The net sell activity reported by the company for mutual funds for Jul 2016 was $1.68 billion, compared with $1.1 billion in Jul 2015 and $2.05 billion in Jun 2016. The net buy activity for Exchange Traded Funds amounted to $1.92 billion compared with $1.80 billion in Jul 2015 and $3.10 billion in Jun 2016.

Further, the money market funds reported net buy activity of $701 million, compared with $2.21 billion in Jul 2015 and a net sales activity of $1.80 billion in Jun 2016.

The new fully automated investment advisory service offered by Schwab will likely boost its trading revenues going forward. However, the company’s elevated expenses, sensitivity to interest rates and significant dependence on fee-based revenue streams remain matters of concern.

Currently, Schwab has a Zacks Rank #3 (Hold).

Among other investment brokers, TD Ameritrade Holding Corporation (NASDAQ:AMTD) reported $760.2 billion in total client assets, up 3% from the prior month and 8% year over year. Also, AMTD came up with average client trades per day of 454,000 in its activity report for Jul 2016. The reported figure declined 3% from the prior month while it was almost in line with the prior-year period.

E*TRADE Financial Corporation (NASDAQ:ETFC) reported a fall in its Daily Average Revenue Trades (DARTs) in the monthly market activity report for Jul 2016. DARTs were 147,100, down 1% sequentially and 2% on a year-over-year basis.

Interactive Brokers Group, Inc.’s (NASDAQ:IBKR) total client DARTs were 602,000 in July, down 8% from Jul 2015 and 6% from Jun 2016. Further, total customer accounts were 360,100, up 15% from the prior-year month and 1% from the preceding month.