Strong Returns Boost SDBA Balances

The average self-directed brokerage account (SDBA) balance rose to $267,609 in the first quarter, an 8.7% increase from the last quarter of 2018, largely due to strong market returns, according to Charles Schwab’s SBDA Indicators Report.

Thirty-seven percent of participants’ assets were in mutual funds, the same as the previous quarter. Equities were the second-highest holding, at 29%, followed by exchange-traded funds (ETFs) (17%), cash (13%) and fixed income (3%).

Last year, Schwab’s analysis found 18.7% of SDBA accounts were managed by an independent investment adviser.  Those participants who used advisers displayed a more diversified asset allocation mix and had a lower concentration of assets in particular securities. As for ETF holdings, advised participants again had more balance among all the holdings, not having more than 3% of any one ETF.

Among mutual funds, large cap represented 29% of all allocations, followed by taxable bond (20%), international (16%), hybrid (12%) and small-cap funds (12%).

Among equities, Apple remained the top overall holding, representing 9.1% of all equity holdings. Amazon was next (6.4%), followed by Berkshire Hathaway (2.5%), Microsoft (2.1%) and Facebook (1.8%).

Among ETFs, investors allocated the most dollars to U.S. equity (48%), followed by international equity (16%), U.S. fixed income (15%) and sector ETFs (11%).

On average, participants made just 6.5 trades during the quarter and held 10 positions in their SDBA. Baby Boomers ended the quarter with the largest balance of all generations, at $374,622, up from $342,810 in the last quarter of 2018. Gen Xers had the next highest balance ($202,481), followed by Millennials ($65,928).

The average age of the SDBA participant was 51. Gen Xers made up 41% of all participants, followed by Baby Boomers (40%) and Millennials (12%).

The report is based on data from participants in the Schwab Personal Choice Retirement Account (PCRA).