Hampered by less activity and investor wariness, Charles Schwab Corp. announced Friday that its trading volume fell in July from a year earlier.
The San Francisco-based financial services company reported that it gained $6.2 billion of new assets from customers last month despite the fact daily average client trades declined 1% from a year earlier and were flat from June.
In May and June, Schwab [SCHW] reported $41.3 billion of outflows.
Analysts said trading volume has declined across the investment industry this year since the market has declined earlier this year.
Despite some concerns, Matthew Snowling, an analyst at FBR Capital Markets, said he continues to expect Schwab to outperform. He said that Schwab’s client metrics from July were “better than expected.”
“Although lower trading activity likely will continue to be a near-term headwind and fed funds rates remain under pressure, operating earnings continue to grow as the company builds its client asset base and balance sheet, lowers its cost of funds, reinvests lower-yielding cash into longer-dated securities, and recaptures some of the lost fee waivers from its money funds as short-term market rates rise. We continue to view the stock as attractive relative to the core earnings power of the franchise, particularly given the lack of balance sheet and regulatory risk, and, as such, we believe patient investors will be rewarded in the medium to long term,” he wrote Friday.
Schwab's client assets under management rose to $1.421 trillion, up 11% from a year earlier and 4% from a month earlier. In July, Schwab added 53,000 new accounts, down from 58,000 in both June and July 2009.
In July, Schwab reported flat quarterly results, but the company's top executive remained upbeat about the remainder of this year.
Charles Schwab, the company’s chairman, said in a press release in July that the firm’s financial performance “rebounded strongly” during the quarter. He said he expects economic conditions to improve.