RiverPark Advisors, an investment advisory firm, and sponsor of the RiverPark family of mutual funds released its “RiverPark Large Growth Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. The fund outperformed in the first quarter by returning 16.59%. The market also performed well with the S&P 500 index returning 7.50% and the Russell 1000 Growth index returning 14.37% in the same period. In addition, please check the fund’s top five holdings to know its best picks in 2023.
RiverPark Large Growth Fund highlighted stocks like The Charles Schwab Corporation (NYSE:SCHW) in the first quarter 2023 investor letter. Headquartered in Westlake, Texas, The Charles Schwab Corporation (NYSE:SCHW) is a savings and loan holding company. On May 8, 2023, The Charles Schwab Corporation (NYSE:SCHW) stock closed at $47.63 per share. One-month return of The Charles Schwab Corporation (NYSE:SCHW) was -7.89%, and its shares lost 26.25% of their value over the last 52 weeks. The Charles Schwab Corporation (NYSE:SCHW) has a market capitalization of $86.625 billion.
RiverPark Large Growth Fund made the following comment about The Charles Schwab Corporation (NYSE:SCHW) in its Q1 2023 investor letter:
“The Charles Schwab Corporation (NYSE:SCHW): SCHW shares were our top detractor for the quarter as bank stocks sold off aggressively following the failures of Silicon Valley Bank and Signature Bank. Despite the bulk of Schwab’s $7 trillion of assets being in the brokerage business, the company does have a large deposit base on which it earns net interest income. While Schwab has seen asset growth increase as depositors look for safety, the company has seen persistent cash sorting (depositors moving cash from deposits to money market funds to generate higher yields). This sorting has two negative consequences: first, it reduces the firm’s profitability because Schwab earns more in net interest income on assets on deposit than it does on management fees from money market funds, and second, it forces Schwab to sell assets held by its bank subsidiary to fund the cash transfers into money market funds. Because of the recent rapid rise in interest rates, these asset sales could cause Schwab to realize trading losses. We think this latter scenario is unlikely for two reasons: first, following historical patterns from past cycles, we believe the cash sorting trend will slow in the coming months, and second, Schwab has enough available liquidity from other sources to fund nearly 100% of its deposit base without selling marked-down securities.
Schwab and TD Ameritrade (which Schwab acquired in October 2020) have been the leading share gainers in the discount brokerage industry over the last decade, with both generating substantial organic asset growth while also growing operating margins and remaining amongst the price leaders on all products. With these two businesses now combined, revenue and expense synergies should accelerate in 2023, and we believe the company will be in an even stronger position to gather assets and drive long-term margins and free cash flow in the years to come.”
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The Charles Schwab Corporation (NYSE:SCHW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held The Charles Schwab Corporation (NYSE:SCHW) at the end of the fourth quarter which was 75 in the previous quarter.
We discussed The Charles Schwab Corporation (NYSE:SCHW) in another article and shared the list of biggest holding companies in USA. In addition, please check out our hedge fund investor letters Q1 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.
