Balances leap an average of 8.7% from Q4 2019New data from Charles Schwab
May 16, 2019 — SAN FRANCISCO–(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%).
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%).
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
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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.