Schwab Report: Self-Directed 401(K) Investors’ Balances Continue To Rise On Strong Market Performance

WESTLAKE, Texas-- According to Charles Schwab's latest 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 $347,437 for the third quarter of 2024, up by 20.7% year-over-year and a 3.7% increase from the second quarter of 2024.

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 exchange-traded funds (ETFs), mutual funds and other securities that are not part of their retirement plan's core investment offerings.

SDBA balances continued to rise in the third quarter on strong market performance amid interest rate cuts, easing inflation, and a cooling labor market.

Allocation Trends

Overall, participant holdings in the third quarter of 2024 were similar to the second quarter.

• Equities: Equities continued to hold the majority of assets at 34.4%. The largest equity sector holding was Information Technology at 37%; Apple (10.9%) reclaimed the top spot from Nvidia (10.4%) as the largest individual stock holding and Tesla (6.1%), Amazon (4.8%), and Microsoft (3.8%) remained top holdings.
  
• Mutual funds: Mutual funds held steady as the second largest holding at 27.9%, with the largest allocation going to large-cap stock funds at 34.2%, followed by money market funds (16%) and taxable bond funds (14.6%).
  
• ETFs: ETFs held 25.7% of client assets. U.S. equity (52%) was again the most popular ETF investment category, followed by U.S. fixed income (13%) and international equity (12%).
  
• Cash and Fixed Income: Cash and equivalents held steady from the second quarter at 7.4%, while fixed income decreased slightly to 4.7%.

Other Report Highlights

• Advised accounts held higher average account balances compared to non-advised accounts, $548,576 vs $303,297.
  
• As in the second quarter, Gen X held the largest share of advised accounts (51.9%), followed by Baby Boomers (23.4%) and Millennials (22.9%).
  
• Gen X made up 46.6% of SDBA participants, followed by Baby Boomers (25.3%) and Millennials (25.2%).
  
• Once again, Baby Boomers had the highest SDBA balances at $571,441, followed by Gen X at $346,306, and Millennials with $122,366.
  
• On average, participants held 11.7 positions in their SDBAs, similar to the second quarter.
  
• Trading volumes also remained similar to the second quarter, with an average of 13 trades per account.
  
  
  

About the SDBA Indicators Report

The SDBA Indicators Report includes data collected from approximately 295,000 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 2024, and can be found here, along with prior reports.

About Charles Schwab

At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients' goals with passion and integrity.

More information is available at www.aboutschwab.com. Follow us on X, Facebook, YouTube and LinkedIn.

Disclosures:

Investment and Insurance Products: Not a Deposit • Not FDIC Insured • Not Insured by any Federal Government Agency • 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.

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.

The information here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of securities and investment strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction for his or her own particular situation. Data here is obtained from what are considered reliable sources; however, its accuracy, completeness or reliability cannot be guaranteed.

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Source: The Charles Schwab Corporation

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