Income Planning

Self-Directed 401(k) Balances Down 6.3% On The Heels of A Volatile Q4

2018 Correction weighed on participant accounts

New data from Schwab’s SDBA Indicators Report

SAN FRANCISCO, March 13, 2019 — According to Charles Schwab’s SDBA Indicators ReportTM, an industry-leading benchmark on retirement plan participant investment activity within self-directed brokerage accounts (SDBAs), the market correction that occurred during the fourth quarter of 2018 weighed on participant accounts, as the average SDBA balance fell to $246,153, a decline of 10.6 percent from 3Q 2018 and 6.3 percent year-over-year.

SDBAs are brokerage accounts within retirement plans, including 401(k) 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 2017. Allocations to equities remained at 28 percent, and exchange-traded funds (17%), cash (15%), and fixed income (3%) rounded out participants’ portfolios. Despite the high market volatility experienced in the fourth quarter, participants averaged just 2.2 trades per month.

Allocation Trends

The data also reveals specific sector holdings within each investment category:

mutual funds continued to hold the highest percentage of participant assets at approximately 37 percent, the same as Q4 2017...

  • With regard to mutual funds, large-cap funds represented approximately 28 percent of all allocations, followed by taxable bond (21%), international (16%), hybrid (12%) and small-cap (12%) funds.
  • Apple (AAPL) was the top overall equity holding, representing approximately 9 percent of the equity allocation of portfolios. Amazon (AMZN) was the second-largest equity allocation, representing approximately 6.5 percent of portfolios, an increase of 3 percent since 4Q 2017. Berkshire Hathaway (BRKA) (3%), Microsoft (MSFT) (2%) and Facebook (FB) (1.75%) rounded out the top five equity holdings.
  • Among exchange-traded funds, investors allocated the most dollars to U.S. equity (48%), international equity (16%) and U.S. fixed income (15%).

Report Highlights

Additional findings include:

  • On average, participants held approximately 10 positions in their SDBA.
  • Baby Boomers and Gen X made up approximately 41 percent of SDBA participants each, followed by Millennials at 12 percent.
  • The average age of an SDBA participant was 51. Seventy-six percent of participants were male and 24 percent were female.

About the SDBA Indicators ReportTM

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 ReportTM provides insight into PCRA users’ perceptions of the markets and the investment decisions they make.

Data contained in this quarterly report is from the fourth quarter of 2018, and can be found at, along with prior reports.




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