BNY Mellon Oversees $62 Trillion in Client Assets. Custody Is the Quietest Fee Machine in Finance.
BNY Mellon has outperformed all other major bank stocks over the past five years.
Overview
There are several different types of banks that handle various functions for their customers and often perform differently, depending on the market.
There are commercial banks that manage assets for consumers and businesses, investment banks that help institutions get access to capital from other investors, and custody banks that simply hold and service assets for large institutional customers. Some of the larger banks do all three, but typically have a specialty.
Details
Probably the least considered, but perhaps best investment of the three in recent years are custody banks. There are only a handful of major custody banks that can handle and are trusted with the trillions of dollars they oversee, so they are protected by a competitive moat, and they have a simple fee-based business model that generates reliable earnings through various market cycles.
Source
Originally published at www.fool.com.
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