WESTLAKE, Texas-- 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 at $287,769 for the third quarter of 2023, up by 5.3% year-over-year and a 9.2% decrease from the prior quarter. Trading volumes were lower at an average of 7.8 trades per account compared to 10.3 trades per account in the second quarter and lower than a year ago.
On September 1, 2023, Schwab completed the transition of TD Ameritrade SDBA retirement plans and participants to the Schwab platform, which affected some of the data in the third-quarter report including average balances and the number of participant accounts included in the report.
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 (ETFs), mutual funds and other securities that are not part of their retirement plan's core investment offerings.
Allocation Trends
Overall, participant holdings were similar to the second quarter.
- Equities: Equities remained the largest holding at 34.2%. The largest equity sector holding was Information Technology at 30.1%. The top equity holdings remained Apple (12.2%), Tesla (8.8%), Amazon (4.6%), NVIDIA (4.5%) and Microsoft (3.6%).
- Mutual funds: Mutual funds were again the second largest holding at 28.8%, with the largest allocation going to large-cap stock funds at 32.7%, followed by taxable bond funds (15.6%). Money market fund holdings were higher at 13.6%, rising above the allocation to international funds (12.1%).
- ETFs: ETFs held 21.9% of participant assets. Among ETFs, investors continued to allocate the most dollars to U.S. equity (51.8%), followed by fixed income (14.1%), international equity (13%) and sector (10.2%) ETFs.
- Cash and Fixed Income: Cash & equivalents held 9.7% of participant assets while 5.4% of assets were held in fixed income.
Other Report Highlights
- Advised accounts held higher average account balances compared to non-advised accounts, $468,516 vs. $251,723.
- Gen X had the most advised accounts (52%), followed by Baby Boomers (27%) and Millennials (18%).
- Gen X made up approximately 46% of SDBA participants, followed by Baby Boomers (28%) and Millennials (21%).
- Baby Boomers had the highest SDBA balances at an average of $466,246, followed by Gen X at $270,370 and Millennials at $97,875.
- On average, participants held 11.8 positions in their SDBAs at the end of Q3 2023, slightly lower than the prior year and prior quarter.
About the SDBA Indicators Report
The SDBA Indicators Report includes data collected from approximately 283,000 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 third quarter of 2023, and can be found here, along with prior reports.
About Charles Schwab
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Disclosures:
Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value
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.
For participants who utilize the Personal Choice Retirement Account (PCRA), the following fees and conditions may apply: Schwab's short term redemption fee of $49.95 will be charged on redemption of funds purchased through Schwab's Mutual Fund OneSource® service (and certain other funds with no transaction fee) and held for 90 days or less. Schwab reserves the right to exempt certain funds from this fee, including Schwab Funds®, which may charge a separate redemption fee, and funds that accommodate short-term trading.
Trades in no-load mutual funds available through Mutual Fund OneSource service (including Schwab Funds) as well as certain other funds, are available without transaction fees when placed through schwab.com or our automated phone channels. Schwab reserves the right to change the funds we make available without transaction fees and to reinstate fees on any funds. Funds are also subject to management fees and expenses.
Figures are based on all PCRA participants with a minimum balance of $5,000 and a maximum balance of $10,000,000 in their PCRA account. All data is for informational purposes only. Schwab does not guarantee the accuracy, timeliness or completeness of the information.
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can request a prospectus by calling 800-435-4000. Please read the prospectus carefully before investing. Money Market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
Charles Schwab & Co., Inc., member SIPC, receives remuneration from fund companies for record keeping, shareholder services and other administrative services for shares purchased through its Mutual Fund OneSource service. Schwab also may receive remuneration from transaction fee fund companies for certain administrative services.
The information contained herein is obtained from third-party sources and believed to be reliable, but its accuracy or completeness is not guaranteed. 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.
(1223-3BX5)
Source: The Charles Schwab Corporation