Charles Schwab Q4 ETF Assets Rise Sharply on Equity Bets
The No. 5 ETF issuer’s assets jumped 27% to $2.34 trillion as SCHD more than tripled in size.
Charles Schwab Corp., the fifth-largest U.S. ETF issuer, said fourth-quarter exchange-traded fund assets soared by $494.5 billion, or 27%, as investors poured money into its equity funds amid jumping stock markets.
Westlake, Texas-based Schwab’s ETF assets rose to $2.34 trillion in Q4, up from $1.84 trillion in the same quarter in 2023, the company said in a statement. Exchange-traded fund assets at the company, which manages 31 U.S. ETFs, rose by $61.5 billion, or 2.7%, from Q3's $2.27 trillion.
U.S. investors poured a record $1.12 trillion into ETFs last year to tap into rising equities pushed higher by demand for artificial intelligence, technology, crypto, and financial assets. Schwab’s surging assets followed those of BlackRock Inc., the world’s biggest ETF issuer, which last week reported $390 billion in fourth-quarter ETF inflows.
Aniket Ullal, head of CFRA ETF Research & Analytics and a member of the etf.com editorial review board, said that funds, both ETFs and mutuals, accounted for 56% of Schwab’s 2024 revenues from asset management and administration fees, which is about 16% of its total 2024 revenues.
"So the strong growth in ETF assets is very meaningful to the firm’s overall prospects," he added.
Schwab's SCHD, SCHX Rake in Billions in Inflows
Schwab’s assets jumped as its biggest funds pulled in new assets. Its biggest, the $65.7 billion Schwab U.S. Dividend Equity ETF (SCHD) added $6.02 billion in fourth-quarter inflows, triple that of the third quarter and more than six times the flows in the 2023 fourth quarter. That fund is exclusive to companies with a 10-year history of paying dividends.
Its second-largest, the $52.3 billion Schwab U.S. Large-Cap ETF (SCHX), pulled in $3.94 billion in the fourth quarter, again, more than triple the fund’s third-quarter flows and a fivefold increase from the same quarter in 2023. SCHX tracks a market-cap-weighted index of the 750 largest US companies.
Meanwhile, State Street Corp., the number three U.S. issuer, said last week that its SPDR ETF unit pulled in less cash in the fourth quarter of 2024 than in the same period in 2023, as investors cut the amount of money that went into the company’s flagship SPDR S&P 500 ETF Trust (SPY) by more than half.
Editor's Note: This story has been updated to include a quote from Aniket Ullal, head of CFRA ETF Research & Analytics.