Home Hedge Funds Reasons for the Outperformance of Charles Schwab Corporation (SCHW)

Reasons for the Outperformance of Charles Schwab Corporation (SCHW)


Ariel Investments, an investment management company, released its “Ariel Appreciation Fund” fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. Towards the end of 2023, Investor sentiment shifted from fears of a recession towards optimism for a soft landing. Against this backdrop, the Ariel Appreciation fund increased +10.70% in the quarter, trailing the +12.11% and +12.82% returns of both the Russell Midcap Value and Russell Midcap indices. Over the trailing one-year period, the fund traded +10.62% higher, lagging the Russell Midcap Value Index’s +12.71% gain and the +17.23% return of the Russell Midcap Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Ariel Appreciation Fund featured stocks like The Charles Schwab Corporation (NYSE:SCHW) in the fourth quarter 2023 investor letter. Headquartered in Westlake, Texas, The Charles Schwab Corporation (NYSE:SCHW) is a savings and loan holding company. On March 11, 2024, The Charles Schwab Corporation (NYSE:SCHW) stock closed at $66.95 per share. One-month return of The Charles Schwab Corporation (NYSE:SCHW) was 6.76%, and its shares gained 18.12% of their value over the last 52 weeks. The Charles Schwab Corporation (NYSE:SCHW) has a market capitalization of $122.142 billion.

Ariel Appreciation Fund stated the following regarding The Charles Schwab Corporation (NYSE:SCHW) in its fourth quarter 2023 investor letter:

“Additionally, financial services provider,The Charles Schwab Corporation (NYSE:SCHW), advanced in the period. A stronger than expected short-term debt paydown, better than expected net interest income and high confidence SCHW can meet the new upcoming regulatory leverage ratio requirement ahead of expected implementation, more than offset an aggregate decline in cash balances and a downward revision to full-year guidance. In our view, SCHW’s risk/reward is skewed to the upside and expect the company to flex its scale and customer-centric focus in support of its industry leading cost advantage. We also think the TD Ameritrade acquisition will continue to create incremental value and further enhance SCHW’s marketplace standing and long-term growth trajectory.”

Charles Schwab, bank, financeCharles Schwab, bank, finance

Charles Schwab, bank, finance

Photo by Brendan Church on Unsplash

The Charles Schwab Corporation (NYSE:SCHW) is not on our list of 30 Most Popular Stocks Among Hedge Funds.  At the end of the fourth quarter, The Charles Schwab Corporation (NYSE:SCHW) was held by 81 hedge fund portfolios, up from 77 in the previous quarter, according to our database.

We discussed The Charles Schwab Corporation (NYSE:SCHW) in another article and shared Baron Partners Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.

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