Self-directed brokerage account (SDBA) balances achieved $328,239 for the first quarter of 2024, for an increase of 10% year-over-year and a 5.8% rise compared to Q4 2023, according to Schwab’s latest SDBA Indicators Report.
The report includes data from 286,000 retirement plan participants with account balances between $5,000 to $10 million in their Schwab Personal Choice Retirement Account (PCRA). It tracks investment activity ranging from asset allocation trends and asset flow in exchange-trade fund (ETF) and mutual fund categories, to age trends and trading activity.
SDBAs are brokerage accounts within workplace 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 ETFs, mutual funds and other securities that are not part of their retirement plan’s core investment offerings.
According to the findings, participants in the Schwab personal Choice Retirement Account reached average balances of $328,239, up from $298,543 a year ago, and up from $310,400 in Q4 2023. Schwab found that trading volumes were higher compared to the last quarter, for an average of 12.3 trades relative to 9.7 in the final quarter of 2023.
All balances among different generations were higher in Q1 2024. Baby Boomers ended the quarter with the largest balance at $531,201 compared to $502,354 in Q4 2023. Gen Xers came in second at $318,481 while Millennials finished at $119,278. No data was recorded for Gen Zers.
Gen Xers made up the most of SDBA participants (46%), followed by Baby Boomers (27%) and Millennials (21%), according to Schwab. Those in the Sandwich Generation were also likelier to use an advisor compared to any other age cohort. Gen Xers had the most advised accounts at 51.6%, compared to Baby Boomers (25%) and Millennials (19%).
Allocation trends
Overall, the report finds that participant holdings in Q1 2024 were comparable to the last quarter of 2023. Equities remained the largest holding at 34.1%, with information technology coming in as the leading equity sector at 34.6%. The top holdings were Apple (9.7%), Nvidia (8.2%), Amazon (5.2%), Tesla (4.9%), and Microsoft (4.1%).
Mutual funds came in next at 28.4%. The largest allocation went to large-cap stock funds (34.2%), trailed by money market funds (15%) and taxable bond funds (14.4%).
ETFs followed at 24.4% of participant assets, with investors continuing to allocate their funds to U.S. equity (51.7%), U.S. fixed income (12.8%), international equity (11.9%), and sector ETFs (9.5%).
Cash and fixed income finished last, with cash and equivalents holding 8.1% of participant assets while fixed income assumed 5.1%.
SEE ALSO:
- Self-Directed 401(k) Investors’ Balances Rise with Markets in Q4 2023
- Self-Directed 401(k)s Fall 9.2% From Q2 2023
- Self-Directed 401(k)s See 6.6% Gain in Q1 2023
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
