Schwab Report: Self-Directed 401(k) Investors Stay the Course in Q3, See Balances Increase 12.8% Year-over-Year
Charles Schwab's latest SDBA Indicators Report reveals a 12.8% year-over-year increase in average account balances across self-directed brokerage accounts, reaching
- Average account balances increased by 12.8% year-over-year to $341,068.
- Participants engaged in steady trading with an average of 13.1 trades per account.
- Advised accounts had significantly higher average balances ($542,365) compared to non-advised accounts ($294,215).
- Equities constituted the largest segment of participant assets at 36%.
- Average account balances decreased by 2.0% from Q2 2021.
- Trading volume slightly declined compared to the previous quarter.
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 third quarter SDBA Indicators Report overall showed steady investing behavior among participants. Trading volumes were similar to trades from one year ago and slightly lower than last quarter at an average of 13.1 trades per account compared to 13.8 in Q2.
Participant holdings also remained similar to last quarter, with a slight increase in cash holdings. The highest allocation of participant assets was in equities (
Allocation Trends
The data also reveals specific asset class and sector holdings within each investment category:
-
Mutual funds: Large-cap funds had the largest allocation at approximately
34% of all mutual fund allocations, followed by taxable bond (19% ) and international (15% ) funds. -
Equities: The largest equity sector holding was Information Technology at
29.8% , up slightly from29.3% last quarter. The top five equity holdings remained the same as last quarter. Apple was the top overall equity holding, comprising10.6% of the equity allocation of portfolios. The other equity holdings in the top five include Tesla (6.9% ), Amazon (4.9% ), Microsoft (2.9% ) and NVIDIA (2.0% ). -
ETFs: Among ETFs, investors continued to allocate the most dollars to
U.S. equity (50% ), followed by sector ETFs (14% ),U.S. fixed income (14% ) and international equity (13% ).
Other Report Highlights
-
Advised accounts held higher average account balances compared to non-advised accounts -
vs.$542,365 .$294,215 -
Gen X had the most advised accounts at approximately
49% , followed by Baby Boomers (35% ) and Millennials (14% ). -
Gen X made up approximately
45% of SDBA participants, followed by Baby Boomers (31% ) and Millennials (18% ). -
Baby Boomers had the highest SDBA balances at an average of
, followed by Gen X at$526,193 and Millennials at$301,686 .$101,670 - On average, participants held 12.4 positions in their SDBAs at the end of Q3 2021, consistent with Q2 2021.
About the SDBA Indicators Report
The SDBA Indicators Report includes data collected from approximately 176,000 retirement plan participants who currently have balances between
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 third quarter of 2021 and can be found here, along with prior reports.
About
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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,
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
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.
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Charles Schwab
330-908-4334
mike.peterson@schwab.com
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FAQ
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