Schwab Report: Self-Directed 401(k) Investor Balances Rebound in Q1 Following Strong Market Performance
May 16 2019 - 9:00AM
Business Wire
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 SDBA balance jumped to $267,609 at the end of
Q1 2019, an increase of 8.7 percent from Q4 2018, as the markets
bounced back from the sharp losses experienced at the end of
2018.
SDBAs are brokerage accounts within retirement plans, including
401(k)s and other types of retirement plans, which participants can
use to invest in stocks, bonds, exchange-traded funds, mutual funds
and other securities that are not part of their retirement plan's
core investment offerings.
According to the Schwab data, mutual funds continued to hold the
highest percentage of participant assets at approximately 37
percent, the same as Q4 2018. Equities remained the second-largest
holding at 29 percent, followed by exchange-traded funds (17%),
cash (13%) and fixed income (3%).
Allocation Trends
The data also reveals specific sector holdings within each
investment category:
- With regard to mutual funds, large-cap
funds represented approximately 29 percent of all allocations,
followed by taxable bond (20%), international (16%), hybrid (12%)
and small-cap (12%) funds.
- Apple (AAPL) remained the top overall
equity holding, representing 9.1 percent of the equity allocation
of all portfolios. Amazon (AMZN) was the second-largest allocation,
representing 6.4 percent of portfolios, and Berkshire Hathaway
(BRKA) (2.5%), Microsoft (MSFT) (2.1%) and Facebook (FB) (1.8%)
rounded out the top five equity holdings.
- Among exchange-traded funds, investors
allocated the most dollars to U.S. equity (48%), international
equity (16%), U.S. fixed income (15%), and sector ETFs (11%).
Report Highlights
Additional findings include:
- On average, participants made just 6.5
trades during the quarter and held approximately 10 positions in
their SDBA.
- Baby Boomers ended the quarter with the
largest balance of all generations: $374,622, up from $342,810 in
Q4 18. They were followed by Gen X ($202,481) and Millennials
($65,928).
- The average age of an SDBA participant
was 51. Gen X made up 41 percent of participants, followed by Baby
Boomers (40%) and Millennials (12%).
About the SDBA Indicators Report™
The SDBA Indicators Report includes data collected from
approximately 137,000 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 2019, and can be found at www.schwab.com/sdbaindicators,
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.
Disclosures
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.
Brokerage Products: Not FDIC Insured • No Bank Guarantee
• May Lose Value
© 2019 Charles Schwab & Co., Inc. Member SIPC.
(0519-9T8S)
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version on businesswire.com: https://www.businesswire.com/news/home/20190516005139/en/
Mike PetersonCharles
Schwab330-908-4334mike.peterson@schwab.com
Mike GelorminoIntermarket
Communications212-754-5479mgelormino@intermarket.com
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