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The Markets March 13, 2019
Self-Directed Brokerage Accounts Fell 10.6% in Value in 4Q18
Account values fell sharply from the previous quarter and were 6.3% lower than the previous year, according to Charles Schwab’s SDBA Indicators Report.
Reported by Lee Barney
The market volatility that occurred in the fourth quarter of 2018 weighed heavily on retirement plan participants’ self-directed brokerage accounts (SDBAs), with the average balance falling by 10.6% from the previous quarter to $246,153. Year-over-year, balances were down 6.3%.
At 37%, mutual funds held the highest percentage of participant asset, on par with the fourth quarter of 2017. This was followed by equities (28%), exchange-traded funds (17%), cash (15%) and fixed income (3%). Despite the high market volatility in the fourth quarter of 2018, participants averaged a mere 2.2 trades for the month.
Among mutual funds, participants’ largest allocation was to large-cap funds (28%), followed by taxable bond funds (21%), international funds (16%), hybrid funds (12%) and small-cap funds (12%).
Among mutual funds with equity exposure, Apple was the top holding (9%), followed by Amazon (6.5%), Berkshire Hathaway (3%), Microsoft (2%) and Facebook (1.75%).
Among exchange-traded funds, investors allocated the most dollars to U.S. equity (48%), international equity (16%) and U.S. fixed income (15%).
Schwab also found that, on average, participants held approximately 10 positions in the SDBA. Baby Boomers and Gen X made up approximately 41% of SDBA participants each, followed by Millennials (12%).
The average age of a SDBA participant was 51. Seventy-six percent of SDBA participants were male, and 24% female.
The SDBA Indicators Report is based on data from 137,000 retirement plan participants who have balances between $5,000 and $10 million in their Schwab Personal Choice Retirement Account.