2024-03-22 10:55:00 ET
Summary
- Shares in Charles Schwab returned -16% last year, making it the Fund's worst-performing stock.
- It is true that Schwab has a large portfolio of US government and agency-backed securities whose value declined when interest rates rose, but that is where the similarity ends.
- Keep in mind, though, that higher interest rates are still good for Schwab's earnings power in the long run.
- We believe the stock will generate an attractive long-term return across a range of long-term interest rate scenarios.
The following segment was excerpted from this fund letter.
Charles Schwab & Co. ( SCHW )
Shares in Charles Schwab returned -16% last year, making it the Fund's worst-performing stock. By holding steady in the down market of 2022, it was one of the Fund's best-performing stocks that year. This reversal in stock performance reflects a realization that rising interest rates are not an unalloyed good for Schwab in the short run....
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For further details see:
Sequoia Fund - Charles Schwab: Enviable, High-Return Franchise Entirely Intact