Charles Schwab Corp

Charles Schwab continues to grow its earnings per share at healthy rates, with a reported EPS of $4.87 in 2025 and a projected EPS of $7.62 in 2027, indicating a two-year growth rate of 56%, or 25% per year. Despite this strong growth, the stock price has lagged, down 8% for the year and trading at 12 times the 2027 EPS estimate, compared to the Index trading at over 20 times. This discrepancy presents an attractive buying opportunity, leading us to add to our position in Schwab during the quarter, making it our third-largest position.

Charles Schwab Corporation is described as a U.S. centric wealth management platform, securities brokerage, and bank. The performance data indicates a trailing 1-year revenue per share growth rate of 10.1% and a trailing 5-year growth rate of 23.6%. However, the fund's return for Charles Schwab Corporation in H1 2026 was -7.0%, contrasting with a 36.6% return for the calendar year 2025.

We exited Charles Schwab as we became more concerned that competition for client cash balances, including potential AI-driven cash sorting, could pressure the company’s profitable float monetization business. This shift in competitive dynamics raised doubts about Schwab's ability to maintain its previous levels of profitability in this area, prompting our decision to exit the position.

The portfolio added US wealth management firm Charles Schwab following share price weakness linked to AI disruption concerns. The team continues to see compelling value in high-conviction businesses trading below their assessment of intrinsic value, indicating a positive outlook for Charles Schwab despite recent market challenges.

Charles Schwab — a firm whose business depends on keeping clients invested — recently told its own clients that the market is expensive, with 12 of the 12 valuation metrics it tracks registering as 'Expensive' or 'Very Expensive' relative to history.

The letter mentions positions in Charles Schwab and BNY Mellon, but does not provide a specific argument or directional stance regarding Charles Schwab's future performance or valuation.

Charles Schwab Corp. delivered a strong performance in 2025, with shares returning 37% and revenue growing over 20%. The company’s earnings per share increased by nearly 50%, driven by robust growth in net interest income. Despite challenges from the regional banking crisis and a temporary dip in net new asset growth during the TD Ameritrade account conversion, Schwab's franchise remains intact. The company has paid down high-cost short-term funding, leading to an expansion of its net interest margin. Schwab is well-positioned in the wealth management space, with total client assets reaching $11.9 trillion, up approximately 18% year-over-year.

We took advantage of market weakness to deploy £44.1m into the Capital portfolio, including the addition of a new position, Charles Schwab (a leading US financial services firm with over $10 trillion assets under management), which we had been monitoring since 2017. This investment reflects our confidence in the long-term prospects of Charles Schwab, given its significant asset base and position in the financial services sector.

Charles Schwab is listed among the top holdings of the Fund, indicating its significance in the portfolio. However, there are no specific arguments or directional language provided regarding its future performance or valuation in the passages.

The Charles Schwab Corporation is mentioned as part of the portfolio, but there is no specific argument or directional language provided regarding its future performance or valuation.