Firm also announces Schwab Stock Slices™ now
available in Schwab Personal Choice Retirement Account®
According to Charles Schwab’s SDBA Indicators Report, an
industry-leading benchmark on retirement plan participant
investment activity within self-directed brokerage accounts
(SDBAs), the average account balance finished Q1 2020 at $252,675,
down approximately 6% year-over-year and down 14% from Q4 2019.
SDBAs are brokerage accounts within retirement plans, including
401(k)s and other types of retirement plans, that participants can
use to invest retirement savings in stocks, bonds, exchange-traded
funds, mutual funds and other securities that are not part of their
retirement plan's core investment offerings.
The first quarter SDBA Indicators Report also showed trading
volumes increased compared to the previous quarter, at an average
of 13 trades per account up from seven in Q4 2019, which is in line
with broader investor activity seen during the first quarter as
major stock indexes fell and trading activity rose amid market
volatility.
Asset allocations remained similar to last quarter, with the
exception of an increase in cash holdings from 12% in Q4 2019 to
19% in Q1. Mutual funds continue to hold a majority of participant
assets (34%), followed by equities (27%), cash (19%), ETFs (17%),
and fixed income (3%).
Allocation Trends
The data also reveals specific sector holdings within each
investment category:
- Mutual funds: Large-cap funds had
the largest allocation at approximately 30% of all mutual fund
allocations, followed by taxable bond (22%) and international (14%)
funds.
- Equities: Information technology
remained the largest equity sector holdings at 29%, up from 27%
last quarter. Apple (AAPL) continues to be the top overall equity
holding, comprising 11% of the equity allocation of portfolios. The
other equity holdings in the top five include Amazon (AMZN) (6.5%),
Microsoft (MSFT) (3.6%), Berkshire Hathaway (BRKA) (2.5%), and
Tesla (TSLA) (2.1%).
- ETFs: Among ETFs, investors
allocated the most dollars to U.S. equity (48%), followed by U.S.
fixed income (18%), international equity (13%) and sector ETFs
(10%).
Report Highlights
- On average, participants held 10 positions in their SDBAs at
the end of Q1 2020, which has remained steady both year-over-year
and quarter-over-quarter.
- Gen X made up approximately 43% of SDBA participants, followed
by Baby Boomers (37%) and Millennials (14%).
- Baby Boomers had the highest SDBA balances at an average of
$367,425, followed by Gen X at $199,071 and Millennials at
$65,207.
- Gen X had the most advised accounts at 45%, followed by Baby
Boomers (41%) and Millennials (11%).
Schwab Stock Slices™ Now Available
Schwab also announced that its new Schwab Stock Slices™ service
is now available in the Schwab Personal Choice Retirement Account®,
the firm’s SDBA offering. Schwab Stock Slices™ lets investors own
any of America’s leading companies in the S&P 500® for as
little as $5 each, even if their shares cost more. Investors can
use the new service to purchase a single stock slice or up to 10
different Stock Slices™ at once, and they can hold slices of as
many S&P 500 companies in their account as they wish through
multiple purchases. Schwab Stock Slices™ are purchased
commission-free online, just like regular stock trades at
Schwab.
About the SDBA Indicators Report
The SDBA Indicators Report includes data collected from
approximately 145,000 retirement plan participants who currently
have balances between $5,000 and $10 million in their Schwab
Personal Choice Retirement Account®. Data is extracted quarterly on
all accounts that are open as of quarter-end and meet the balance
criteria.
The SDBA Indicators Report tracks a wide variety of investment
activity and profile information on participants with a Schwab
Personal Choice Retirement Account (PCRA), ranging from asset
allocation trends and asset flow in various equity, exchange-traded
fund and mutual fund categories, to age trends and trading
activity. The SDBA Indicators Report provides insight into PCRA
users’ perceptions of the markets and the investment decisions they
make.
Data contained in this quarterly report is from the first
quarter of 2020, and can be found here, along with prior
reports.
About Charles Schwab
At Charles Schwab we believe in the power of investing to help
individuals create a better tomorrow. We have a history of
challenging the status quo in our industry, innovating in ways that
benefit investors and the advisors and employers who serve them,
and championing our clients’ goals with passion and integrity.
More information is available at www.aboutschwab.com. Follow us
on Twitter, Facebook, YouTube and LinkedIn.
Investors in mutual funds and ETFs should consider carefully
information contained in the prospectus, including investment
objectives, risks, charges, and expenses. You can request a
prospectus by visiting Schwab.com or calling 800-435-4000. Please
read the prospectus carefully before investing.
Disclosures:
Brokerage Products: Not FDIC‐Insured • No Bank Guarantee •
May Lose Value
The securities shown are for informational purposes only and are
not a recommendation to transact in any security.
Through its operating subsidiaries, The Charles Schwab
Corporation (NYSE: SCHW) provides a full range of securities
brokerage, banking, money management and financial advisory
services to individual investors and independent investment
advisors. Its broker-dealer subsidiary, Charles Schwab & Co.,
Inc. (member SIPC, www.sipc.org), and affiliates offer a complete
range of investment services and products including an extensive
selection of mutual funds; financial planning and investment
advice; retirement plan and equity compensation plan services;
compliance and trade monitoring solutions; referrals to independent
fee-based investment advisors; and custodial, operational and
trading support for independent, fee-based investment advisors
through Schwab Advisor Services. Its banking subsidiary, Charles
Schwab Bank (member FDIC and an Equal Housing Lender), provides
banking and lending services and products. More information is
available at www.schwab.com and www.aboutschwab.com.
This report is for informational purposes only and is not a
solicitation, or a recommendation that any particular investor
should purchase or sell any particular security.
Schwab Personal Choice Retirement Account® (PCRA) is offered
through Charles Schwab & Co., Inc. (member SIPC), the
registered broker/dealer, which also provides other brokerage and
custody services to its customers.
All corporate names are for illustrative purposes only and are
not a recommendation, offer to sell, or a solicitation of an offer
to buy any security.
Schwab Stock Slices™ is not intended to be investment advice or
a recommendation of any stock. Investing in stocks can be volatile
and involves risk including loss of principal. Consider your
individual circumstances prior to investing.
The standard online $0 commission does not apply to trades
placed through a broker ($25). See the Charles Schwab Pricing Guide
for Retirement Plan Accounts for full fee and commission
schedules.
The “S&P 500® Index” is a product of S&P Dow Jones
Indices LLC or its affiliates (“SPDJI”), and has been licensed for
use by Charles Schwab & Co., Inc. (“CS&Co”). Standard &
Poor’s® and S&P® are registered trademarks of Standard &
Poor’s Financial Services LLC (“S&P”); Dow Jones® is a
registered trademark of Dow Jones Trademark Holdings LLC (“Dow
Jones”). Schwab Stock Slices™ is not sponsored, endorsed, sold or
promoted by SPDJI, Dow Jones, S&P, or their respective
affiliates, and none of such parties make any representation
regarding the advisability of using Schwab Stock Slices™ or
investing in any security available through Schwab Stock Slices™,
nor do they have any liability for any errors, omissions, or
interruptions of the S&P 500 Index.
(0620-0TPV)
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version on businesswire.com: https://www.businesswire.com/news/home/20200610005153/en/
Mike Peterson Charles Schwab 330-908-4334
mike.peterson@schwab.com Travis Fishstein The Neibart Group
718-801-8205 schwabrps@neibartgroup.com
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