The Charles Schwab Corporation (SCHW) Benefited from Rising Interest Rate

Ensemble Capital Management, an investment management company, released its 2022 annual investor letter. A copy of the same can be downloaded here. For the fiscal year ended October 31, 2022, the fund returned -29.33% compared to a total return of -14.61% for the benchmark S&P 500 Index for the same period. In addition, please check the fund’s top five holdings to know its best picks in 2022.

Ensemble Capital highlighted stocks like The Charles Schwab Corporation (NYSE:SCHW) in the 2022 annual investor letter. Headquartered in Westlake, Texas, The Charles Schwab Corporation (NYSE:SCHW) is a financial services company. On January 13, 2023, The Charles Schwab Corporation (NYSE:SCHW) stock closed at $82.98 per share. One-month return of The Charles Schwab Corporation (NYSE:SCHW) was 6.13%, and its shares lost 13.14% of their value over the last 52 weeks. The Charles Schwab Corporation (NYSE:SCHW) has a market capitalization of $154.902 billion.

Ensemble Capital made the following comment about The Charles Schwab Corporation (NYSE:SCHW) in its 2022 annual investor letter:

“The Charles Schwab Corporation (NYSE:SCHW) (3.87%* weight in the Fund): Even after being the Fund’s best performing stock in fiscal year 2021, Schwab declined just 1.85% this year, adding 0.67% to the Fund’s relative performance. While Schwab is known as a brokerage company, the majority of the company’s earnings power is derived from the net interest income they earn on client cash balances held in brokerage accounts. Rising interest rates increase the company’s net interest margin, insulating it from the decline in demand triggered by rising interest rates that so many other companies are experiencing this year.”

Photo by Brendan Church on Unsplash

The Charles Schwab Corporation (NYSE:SCHW) is not on our 30 Most Popular Stocks Among Hedge Funds list. As per our database, 75 hedge fund portfolios held The Charles Schwab Corporation (NYSE:SCHW) at the end of the third quarter, and 68 in the previous quarter.

We discussed The Charles Schwab Corporation (NYSE:SCHW) in another article and shared the biggest stocks that benefit from rising interest rates. In addition, please check out our hedge fund investor letters Q4 2022 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.