Charles Schwab's fourth-quarter ETF assets surge on stock bets

Charles Schwab

Charles Schwab Corp., the fifth-largest U.S. ETF issuer, said exchange-traded fund assets surged $494.5 billion, or 27%, in the fourth quarter as investors poured money into its stock funds amid a rally.

Westlake, Texas-based Charles Schwab's ETF assets rose to $2.34 trillion in the fourth quarter, up from $1.84 trillion in the same quarter of 2023, the company said in a statement. The firm, which manages 31 U.S. ETFs, saw its exchange-traded fund assets increase by $61.5 billion, or 2.7%, from $2.27 trillion in the third quarter.

U.S. investors poured a record $1.12 trillion into ETFs last year to take advantage of a stock market driven by demand for artificial intelligence, technology, cryptocurrencies and financial assets. Schwab's surge follows a surge in assets at BlackRock Inc., the world's largest ETF issuer, which last week reported $390 billion in fourth-quarter ETF inflows.

Aniket Ullal, director of ETF research and analysis at CFRA and a member of etf.com's editorial review board, said funds such as ETFs and mutual funds will account for 56% of Charles Schwab's 2024 asset management and management fee revenue, which is about 16%. % of total revenue in 2024.

"So strong growth in ETF assets makes a lot of sense for the company's overall outlook," he added.

Charles Schwab's assets surged as its largest fund scooped up new assets. It is the largest at US$65.7 billion Schwab U.S. Dividend Stocks ETF (SCHD) Fourth-quarter inflows increased by $6.02 billion, three times the third quarter and more than six times the fourth-quarter 2023 flows. The fund specifically targets companies with a 10-year history of paying dividends.

Second largest, $52.3 billion Schwab U.S. Large Cap ETF (SCHX)once again attracted $3.94 billion in capital in the fourth quarter, more than three times the fund's third-quarter flows and five times higher than the same quarter in 2023. SCHX tracks a market capitalization-weighted index of the 750 largest companies in the United States.

Meanwhile, State Street Corp., the third-largest U.S. issuer, said last week that its SPDR ETF unit took in less cash in the fourth quarter of 2024 than in 2023 as investors put less money into the fund. Same period. company flagship SPDR S&P 500 ETF Trust (SPY) More than half.

Editor's note: This story has been updated to quote Aniket Ullal, Head of ETF Research and Analysis, CFRA.