Self-Directed 401k Balances Down in Q1: Schwab Report

Self-directed 401k balances

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Reflecting recent market volatility, average self-directed brokerage account balances at Charles Schwab dropped in the first three months of 2022—down 6.25% from the end of 2021 and down 0.51% year over year.

The findings released today are from Schwab’s Q1 2022 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 Q1 2022 at $332,017, down from $352,764 at the end of 2021.

SDBAs are brokerage accounts within retirement plans, including 401ks 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 first quarter SDBA Indicators align with the performance of volatile equity and bond markets where the combination of a pivoting Federal Reserve and conflict in Ukraine drove volatility up and equity prices down globally.

Despite market turbulence, participants did not make significant changes to their investments during this period. Participant holdings remained similar to the prior quarter, with a slight increase in cash. Individual equities held the majority of participant assets (36%). Mutual funds were the second largest holding at 29%, followed by ETFs (21%), cash (13%), and fixed income (1%).

The data also reveals specific asset class and sector holdings within each investment category. Overall, allocations were very similar to the prior quarter:

Other report highlights

SEE ALSO:

• Self-Directed 401k Balances Rose This Much in 2021

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