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Schwab's Net New Assets Improve Y/Y for August 2015

The Charles Schwab CorporationSCHW released its monthly activity report for August 2015. The company recorded net new assets (bought by existing as well as new clients) of $9.2 billion, reflecting a decline of 6% from the preceding month while it showed an increase of 8% from the prior-year month.

Further, total client assets summed $2.46 trillion, down 4% from July 2015 but up 1% from August 2014. Moreover, the client assets, receiving ongoing advisory services, totaled $1.23 trillion for the month, down 4% from the prior month but up 1% from the year-ago month.

As of August 2015-end, Schwab's average interest-earning assets amounted to $160.6 billion, increasing 2% from July 2015 and 16% from August 2014.

Schwab opened 87,000 new brokerage accounts, at par with the July 2015 level but up 16% from August 2014. Also, the company's active brokerage accounts totaled 9.7 million, almost at par with the previous month and up 4% from the prior-year month.

Clients' banking accounts totaled 1.02 million, growing 1% from the prior-month tally and 6% year over year. Further, Schwab reported 1.49 million corporate retirement plan participants for August 2015, at par with the July-2015 level and up 8% year over year.

Net sell activity in the Mutual Fund for August 2015 was $4,712 million, compared with net sell activity of $1,101 million recorded in the last month and net buy activity of $612 million in the year-ago month. Net buy activity in the Exchange Traded Funds was reported at $1,185 million, reflecting a decline of 34% from the prior-month figure and 22% from the year-ago month tally.

We believe Schwab is well positioned to benefit from improving broader trends in the investment brokerage industry as well as from diversified revenue streams, enhanced equity markets and management's efforts to boost the client base in advisory solutions. However, despite several initiatives to reduce dependency on interest rates, the company's financials will likely remain under pressure due to a persistent low interest rate environment.

Currently, Schwab carries a Zacks Rank #4 (Sell).

Among other investment brokers, TD Ameritrade Holding Corp.'s AMTD average client trades per day came in at 537,000, up 18% from the prior month and 41% from the prior-year period. As of Aug 31, 2015, TD Ameritrade reported $679.1 billion in total client assets, down 4% from the prior month, but up 2% year over year.

For Interactive Brokers Group, Inc. IBKR , total client Daily Average Revenue Trades ("DARTs") was 737,000, increasing 49% from August 2014 and 13% from July 2015. Additionally, E*TRADE Financial Corporation's ETFC DARTs summed 179,908, increasing 21% from the preceding month and 23% from the prior-year month.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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