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The Institutional Risk Analyst

© 2003-2024 | Whalen Global Advisors LLC  All Rights Reserved in All Media |  ISSN 2692-1812 

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Who Leads the Asset Gatherers? | SCHW, MS, GS, AMP, RJF & SF

July 5, 2024 | Premium Service | Happy July fourth! In this edition of The Institutional Risk Analyst, we return to look at Charles Schwab (SCHW) and the other asset gatherers, including Morgan Stanley (MS), Goldman Sachs (GS), Ameriprise Financial (AMP), Raymond James (RJF) and Stifel Financial (SF).


We generally use several groupings to describe commercial banks: Lender Banks, Universal Banks, Consumer Lenders and Asset Gatherers.  We used to think about fintech banks or even crypto banks. With the fall of Silvergate Signature Bank, FTX and others, and now the Fed settlement, maybe we will forget that one for now ("Silvergate, Reverse RPs and the Theology of Prosperity").



Despite the resurgence of bitcoin prices earlier this year, the willingness of institutional investors to risk capital on coin-related ventures remains weak and highly variable one day to the next. The aftermath of the various ETFs and other fund vehicles seems to be first and foremost a liquidity event for incumbents, but now with far less robust volumes than many hoped.


There are a number of crypto ventures we've seen in the past year, including one with a full-blown banking license in Bermuda, yet capital seems to be strangely reluctant to commit. Perhaps investors fear that any prophylaxis devised by counsel will prove inadequate to prevent contagion a la FTX.


None of the companies profiled in this note are taking positions in foreign banks acting for global counterparties as a payments platform focused on coins. Ever resourceful, GS did start a crypto trading effort in 2021. The table below shows the rank of these stocks in the WGA Bank Top 50 Index for Q1 2024. 



As of the end of June 2024, the WGA Bank Top 50 Index was up more than 14.5% vs 9.5% for the Invesco KBW Bank ETF (KBWB).  The WGA Bank Top 10 Index was up more than 15% during this same period. If you want more information about licensing the WGA Bank Top Indices, please email info@rcwhalen.com 



Like the rest of the industry, SCHW reached a peak just short of $80 per share in mid-May and has given ground ever since.  This large cap bank stock is still up 30% over the past year, but this is less than half of the gains seen by recent sector leaders such as Western Alliance (WAL), which is up 75% over the last 12 months but is still trading at just 1.25x book value.

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