Schwab Report: Self-Directed 401(k) Balances Down, Investors Hold Steady as S&P 500 Experiences First Correction in Two Years
June 02 2022 - 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 account balance across all participant
accounts finished Q1 2022 at $332,017, a 0.51% decrease
year-over-year and a 6.25% decrease from Q4 2021.
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 individual stocks and bonds, as
well as 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 align with the performance of
volatile equity and bond markets where the combination of a
pivoting Federal Reserve and conflict in Ukraine drove volatility
up and equity prices down globally. Despite market turbulence,
participants did not make significant changes to their investments
during this period. Participant holdings remained similar to the
prior quarter, with a slight increase in cash. Individual equities
held the majority of participant assets (36%). Mutual funds were
the second largest holding at 29%, followed by ETFs (21%), cash
(13%), and fixed income (1%).
Allocation Trends
The data also reveals specific asset class and sector holdings
within each investment category. Overall, allocations were very
similar to the prior quarter:
- Mutual funds: Large-cap stock
funds had the largest allocation at approximately 35.4% of all
mutual fund allocations. They were followed by taxable bond (18.7%)
and international (14.5%) funds.
- Equities: The largest equity
sector holding was Information Technology at 30.5%, down slightly
from 31.8% the prior quarter and up from 28.5% in the first quarter
of last year. The top five equity holdings remained the same as the
prior quarter. Apple was the largest individual stock holding
(12%), followed by Tesla (9.4%), Amazon (4.7%), Microsoft (3.2%)
and NVIDIA (2.7%).
- ETFs: Among ETFs, investors
continued to allocate the most dollars to U.S. equity (51.3%),
followed by sector ETFs (13.2%), U.S. fixed income (12.6%) and
international equity (12.4%).
Other Report Highlights
- Advised accounts held higher average account balances compared
to non-advised accounts, $525,254 vs. $286,008.
- Gen X had the most advised accounts at 49.6%, followed by Baby
Boomers (32.5%) and Millennials (14.9%).
- Gen X made up 45.5% of SDBA participants, followed by Baby
Boomers (30.0%) and Millennials (18.9%).
- Baby Boomers had the highest SDBA balances at an average of
$520,616, followed by Gen X at $299,520 and Millennials at
$102,113.
- Trading volumes decreased significantly from one year ago, down
to 13.7 trades from 19.6 in Q1 of 2021, and are up slightly from Q4
of 2021 (13.3).
- On average, participants held 12.5 positions in their SDBAs at
the end of Q1 2022, consistent with the prior quarter and up
slightly from 12.2 at the end of Q1 2021.
About the SDBA Indicators Report
The SDBA Indicators Report includes data collected from
approximately 181,000 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 2022, 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.
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.
0622-27E7
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version on businesswire.com: https://www.businesswire.com/news/home/20220602005104/en/
Mike Peterson Charles Schwab 330-908-4334
mike.peterson@schwab.com
Carly Taylor The Neibart Group 973-618-6993
schwabrps@neibartgroup.com
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