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 2019 at $294,105, a 19% increase year-over-year and a 6% increase from Q3 2019.

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.

Asset allocation remained largely the same, with participants finishing the year where they started it and mutual funds holding most participant assets (37%), followed by equities (29%), ETFs (19%), cash (12%) and fixed income (3%). Fourth quarter trading volumes were slightly higher compared to the previous quarter, at an average of 7.2 trades per account up from 6.7 in the third quarter.

Allocation Trends

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

• Mutual funds: Large-cap funds represented approximately 30% of all mutual fund allocations, followed by taxable bond (20%) and international (16%) funds.
• Equities: Information technology dominated equity sector holdings (27%). Apple (AAPL) continues to be the top overall equity holding, increasing quarter-over-quarter from approximately 9.5% of the equity allocation of portfolios to 11%. The other equity holdings in the top five include Amazon (AMZN) (5.5%) followed by Microsoft (MSFT) (2.6%), Berkshire Hathaway (BRKA) (2.4%), and Facebook (FB) (1.6%).
• ETFs: ETFs experienced the largest net asset flows in Q4. Among ETFs, investors allocated the most dollars to U.S. equity (49.7%), with broad US market ETFs in the top three holdings: Vanguard Total Stock Market ETF (4.2%), the SPDR S&P 500 ETF (4.2%) and the Schwab US Broad Market ETF (3.4%). U.S. fixed income (15.2%), international equity (14.7%) and sector ETFs (10.5%) rounded out the allocations in the ETF category.

Report Highlights

Additional findings include:

• Participants averaged approximately 10 positions in their SDBAs at the end of Q4 2019, which has remained steady both year-over-year and quarter-over-quarter.
• Gen X made up approximately 42% of SDBA participants, followed Baby Boomers (38%) and Millennials (13%).
• The average age of an SDBA participant was 51. Seventy-six percent of participants were male and 24% were female.

About the SDBA Indicators Report

The SDBA Indicators Report includes data collected from approximately 142,000 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 fourth quarter of 2019, 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 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.

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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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