The Schwab Self-Directed Brokerage Account Indicators

Transcription

1 The Schwab Self-Directed Brokerage Account Indicators An industry-leading benchmark on retirement plan participant investment activity within self-directed brokerage accounts Quarter Ending June 30, 2013 FOR INSTUTIONAL PURPOSES ONLY Charles Schwab & Co., Inc. (Member SIPC). All rights reserved. ( )

2 An industry-leading benchmark on retirement plan participant investment activity within self-directed brokerage accounts Table of Contents: June 30, 2013 Key Schwab Observations for Quarter Ending June 30, PCRA Participant Profile Information 3 PCRA Participants within Age Bands 7 Market Value Allocation - Asset Classes 8 Market Value Allocation - Equity Sectors 9 Market Value Allocation - Mutual 10 Net Asset Flow - Asset Classes 11 Net Asset Flow - All Investment Categories 12

3 The Schwab Self-Directed Brokerage Account Indicators Key Schwab Observations for the Second Quarter 2013: Participant Summary After seven straight months of positive returns the S&P 500 experienced a slight pull back in June, but managed to turn in a 2.9% return for the quarter and was up 13.8% for the first half of the year. Despite the pull back, overall average participant account balances in Schwab Personal Choice Retirement Account (PCRA) grew by 12.14% from last year and were over $175k for the quarter. Each year during the second quarter we examine the investment trends and behaviors of plan participants based upon age groups. In the second quarter plan participants ages made up 18.3% of the total number of PCRA participants while maintaining an average account balance of $93k. Participants ages maintained an average account balance of $175k, which is 88.4% more than their younger counterparts and represents 30.9% of all PCRA account holders. The largest age group those 50+ account for 50.7% of all account holders and have average account balances of $349k which is almost double the average account balance of the age group. Investing Behavior and General Investing Characteristics Asset Allocation Similar to last year the top holdings among asset classes by participants in all three age groups continued to be Mutual (40%) and Equities (37%). The largest single holding among the three age groups is 47% in Equities by the age group; who gradually increasing their positions 2% from the previous year. While the senior age group continues to have the largest Fixed Income exposure at 4%. Equities The top three sector holdings for all of the age groups are Exchange Traded at 31%, Information Technology at 16% and Financials at 10%. Both the youngest age group and the over 50 reallocated 7% of their holding into ETFs; with the younger group having largest concentration among all age groups at 45%. Mutual A noticeable trend across all age groups was a reduction in their Taxable Bond funds with slight overall decrease of 2% from last year. Even though all age bands moved money out of Taxable Bond they differed on where to allocate the money. The younger group moved some of the money to Asset Allocation funds while the middle and older generations moved the money into International and Large Cap Stock. Asset Flows Net asset flows into Equities (up 67.3%), Fixed Income (up 20.1%), and Mutual (up 14.4%) garnered the vast majority of the net asset flows for the quarter. Of the sector breakdown ETFs accounted for over 39.6% of the overall net asset flows followed by Asset Allocation and International Charles Schwab & Co., Inc. (Member SIPC). All rights reserved. ( ) Page 2

4 PCRA Participants Profile Information* - All Average Age* 49 Top 10 Equity Holdings % of Equity Assets Average PCRA Account Balance $175,824 APPLE INC 5.8% BERKSHIRE HATHAWAY B NEWCL 1.5% Average Positions (per Account) S P D R S&P 500 ETF TR 1.3% Equities 4.64 BANK OF AMERICA CORP 1.2% Mutual 2.91 SPDR GOLD TRUST 1.2% Cash Investments 1.31 GENERAL ELECTRIC COMPANY 1.2% Fixed-Income 0.18 VANGUARD TOTAL STOCK MKTSTK 1.1% Total 9.04 FORD MOTOR COMPANY NEW 1.0% GOOGLE INC 0.9% Average Trades in Quarter (per Account) POWERSHS QQQ TRUST SER 1 0.8% Equities 3.66 Mutual 2.49 Top 10 Mutual Fund Holdings % of MF Assets Fixed-Income 0.04 SCHWAB S&P 500 INDEX FD 2.2% Total 6.19 PIMCO TOTAL RETURN FUND CL D 1.3% PIMCO TOTAL RETURN FUND INSTL 1.2% Median Percent Invested* YACKTMAN FOCUSED SERVICE CL 0.9% PCRA 76.1% SCHWAB TOTAL STOCK MKT 0.8% Core Offering 23.9% OAKMARK EQUITY & INCOME FD CL 0.7% PIMCO INCM CL D 0.7% VANGUARD 500 INDEX FD 0.7% OAKMARK INTL FD CLASS I 0.7% LOOMIS SAYLES BOND FUND CL R 0.6% Investors should consider carefully information contained in the prospectus, including investment objectives, risks, trading restrictions, charges and expenses. You can request a prospectus at or by calling the Schwab Dedicated PCRA Call Center at PCRA (7272). Please read the prospectus carefully before investing. Investment value will fluctuate, and shares, when redeemed, may be worth more or less than original cost. Small cap funds are subject to greater volatility than those in other asset categories. International investments are subject to additional risks such as currency fluctuation, political instability and the potential for illiquid markets. Since sector funds focus investments on companies involved in a particular sector, the funds may involve a greater degree of risk than an investment in other mutual funds with greater diversification. Fixed-income securities are subject to increased loss of principal during periods of rising interest rates. Fixed-income investments are subject to various other risks, including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors. Page 3

5 PCRA Participants Profile Information* - Ages Average Age* 33 Top 10 Equity Holdings % of Equity Assets Average PCRA Account Balance $93,305 APPLE INC 5.4% S P D R S&P 500 ETF TR 2.7% Average Positions (per Account) DAVIDSON KMPNR CT5JAN13FBVI 2.3% Equities 4.92 BANK OF AMERICA CORP 1.6% Mutual 1.73 SCHW US BRD MKT ETF 1.5% Cash Investments 1.46 SPDR GOLD TRUST 1.3% Fixed-Income 0.07 ISHARES MSCI ACWI INDEX MSCI A 1.2% Total 8.18 POWERSHS QQQ TRUST SER 1 1.1% ISHARES CORE S&P ETF 1.1% Average Trades in Quarter (per Account) SCHW US LCAP ETF 1.0% Equities 4.65 Mutual 1.35 Top 10 Mutual Fund Holdings % of MF Assets Fixed-Income 0.02 SCHWAB S&P 500 INDEX FD 3.7% Total 6.02 PURISIMA TOTAL RETURN 3.4% PIMCO ALL ASSET INSTL CL 2.0% Median Percent Invested* SCHWAB TOTAL STOCK MKT 1.8% PCRA 74.4% PIMCO TOTAL RETURN FUND INSTL 1.7% Core Offering 25.6% ALLIANZ GI INCM & GWTH I 1.7% PIMCO ALL ASSET ALL 1.5% ALLIANZ GI HIGH YIELD BD INST 1.2% SCHWAB TARGET 2040 FUND 1.2% YACKTMAN FOCUSED SERVICE CL 1.1% Investors should consider carefully information contained in the prospectus, including investment objectives, risks, trading restrictions, charges and expenses. You can request a prospectus at or by calling the Schwab Dedicated PCRA Call Center at PCRA (7272). Please read the prospectus carefully before investing. Investment value will fluctuate, and shares, when redeemed, may be worth more or less than original cost. Small cap funds are subject to greater volatility than those in other asset categories. International investments are subject to additional risks such as currency fluctuation, political instability and the potential for illiquid markets. Since sector funds focus investments on companies involved in a particular sector, the funds may involve a greater degree of risk than an investment in other mutual funds with greater diversification. Fixed-income securities are subject to increased loss of principal during periods of rising interest rates. Fixed-income investments are subject to various other risks, including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors. Page 4

6 PCRA Participants Profile Information* - Ages Average Age* 45 Top 10 Equity Holdings % of Equity Assets Average PCRA Account Balance $175,740 APPLE INC 7.3% UNITED CONTL HLDGS INC 1.7% Average Positions (per Account) VANGUARD TOTAL STOCK MKTSTK 1.7% Equities 5.83 S P D R S&P 500 ETF TR 1.6% Mutual 2.21 BANK OF AMERICA CORP 1.3% Cash Investments 1.39 DAVIDSON KMPNR CT5JAN13FBVI 1.3% Fixed-Income 0.12 BERKSHIRE HATHAWAY B NEWCL 1.3% Total 9.55 SCHW US BRD MKT ETF 1.1% GENERAL ELECTRIC COMPANY 1.1% Average Trades in Quarter (per Account) POWERSHS QQQ TRUST SER 1 1.1% Equities 4.67 Mutual 1.46 Top 10 Mutual Fund Holdings % of MF Assets Fixed-Income 0.03 SCHWAB S&P 500 INDEX FD 2.7% Total 6.16 YACKTMAN FOCUSED SERVICE CL 1.3% PIMCO TOTAL RETURN FUND CL D 1.0% Median Percent Invested* SCHWAB TOTAL STOCK MKT 1.0% PCRA 74.6% VANGUARD 500 INDEX FD 0.8% Core Offering 25.4% FAIRHOLME FUND 0.8% PIMCO TOTAL RETURN FUND INSTL 0.7% DOUBLELINE TOTAL RETURN BD 0.7% SUNAMERICA FOCUSED 0.7% LOOMIS SAYLES BOND FUND CL R 0.7% Investors should consider carefully information contained in the prospectus, including investment objectives, risks, trading restrictions, charges and expenses. You can request a prospectus at or by calling the Schwab Dedicated PCRA Call Center at PCRA (7272). Please read the prospectus carefully before investing. Investment value will fluctuate, and shares, when redeemed, may be worth more or less than original cost. Small cap funds are subject to greater volatility than those in other asset categories. International investments are subject to additional risks such as currency fluctuation, political instability and the potential for illiquid markets. Since sector funds focus investments on companies involved in a particular sector, the funds may involve a greater degree of risk than an investment in other mutual funds with greater diversification. Fixed-income securities are subject to increased loss of principal during periods of rising interest rates. Fixed-income investments are subject to various other risks, including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors. Page 5

7 PCRA Participants Profile Information* - Ages 50+ Average Age* 57 Top 10 Equity Holdings % of Equity Assets Average PCRA Account Balance $349,052 APPLE INC 5.2% UNITED CONTL HLDGS INC 1.6% Average Positions (per Account) BERKSHIRE HATHAWAY B NEWCL 1.5% Equities 7.49 SPDR GOLD TRUST 1.2% Mutual 2.84 S P D R S&P 500 ETF TR 1.2% Cash Investments 1.41 GENERAL ELECTRIC COMPANY 1.2% Fixed-Income 0.46 VANGUARD TOTAL STOCK MKTSTK 1.0% Total POWERSHS QQQ TRUST SER 1 1.0% SCHW US BRD MKT ETF 0.9% Average Trades in Quarter (per Account) GOOGLE INC 0.9% Equities 5.32 Mutual 1.61 Top 10 Mutual Fund Holdings % of MF Assets Fixed-Income 0.09 PIMCO TOTAL RETURN FUND INSTL 1.3% Total 7.02 SCHWAB S&P 500 INDEX FD 1.3% DOUBLELINE TOTAL RETURN BD FD 1.2% Median Percent Invested* PIMCO TOTAL RETURN FUND CL D 1.2% PCRA 76.5% YACKTMAN FOCUSED SERVICE CL 1.1% Core Offering 23.5% DOUBLELINE TOTAL RETURN BD FD 0.9% PIMCO INCM CL D 0.8% SUNAMERICA FOCUSED 0.8% LOOMIS SAYLES BOND FUND CL R 0.8% VANGUARD TOTAL STOCK MKT IND 0.7% Investors should consider carefully information contained in the prospectus, including investment objectives, risks, trading restrictions, charges and expenses. You can request a prospectus at or by calling the Schwab Dedicated PCRA Call Center at PCRA (7272). Please read the prospectus carefully before investing. Investment value will fluctuate, and shares, when redeemed, may be worth more or less than original cost. Small cap funds are subject to greater volatility than those in other asset categories. International investments are subject to additional risks such as currency fluctuation, political instability and the potential for illiquid markets. Since sector funds focus investments on companies involved in a particular sector, the funds may involve a greater degree of risk than an investment in other mutual funds with greater diversification. Fixed-income securities are subject to increased loss of principal during periods of rising interest rates. Fixed-income investments are subject to various other risks, including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors. Page 6

8 PCRA Participants within Age Bands* - All As of June 30, 2013 June 30, % 50% 50.76% 40% 30% 30.93% 20% 18.30% 10% 0% This chart illustrates the percent of PCRA participants within each age band. Page 7

9 Market Value Allocation - Asset Classes* - All (Year over Year) June 30, 2013 As of June 30, 2013 As of June 30, 2012 Cash Investments 21% Cash Investments 22% Equities 37% Equities 37% Mutual 40% Fixed Income 2% Mutual 38% Fixed Income 3% This chart illustrates the percent of PCRA participant assets in each noted asset class as a percentage of total PCRA assets. Percentages are calculated as of month end. Money market mutual funds are classified under Cash Investments. Page 8

10 Market Value Allocation - Equity Sectors* - All (Year over Year) June 30, 2013 ETFs/Other 31% As of June 30, 2013 Consumer Discretionary 8% Utilities 2% Consumer Staples 5% Energy 7% ETFs/Other 29% As of June 30, 2012 Consumer Discretionary 7% Utilities 2% Consumer Staples 5% Energy 7% Financials 10% Financials 9% Information Technology 16% Mutual 3% Materials 3% Health Care 6% Telecomm 2% Industrials 7% Information Technology 18% Mutual 4% Industrials 7% Telecomm 2% Materials 4% Health Care 6% This chart illustrates the percent of PCRA participant assets in each equity sector, as classified by Standard & Poor s, as a percentage of total PCRA assets within equity securities. Percentages are calculated as of month-end. Page 9

11 Market Value Allocation - Mutual * - All (Year over Year) June 30, 2013 As of June 30, 2013 As of June 30, 2012 Taxable Bond 22% Asset Allocation 12% Taxable Bond 24% Asset Allocation 12% International 16% International 15% Specialized 9% Specialized 9% Small Cap Stock 13% Large Cap Stock 28% Small Cap Stock 13% Large Cap Stock 27% This chart illustrates the percent of PCRA participant assets in each mutual fund category, as classified by Morningstar Inc., as a percentage of total PCRA longterm mutual fund assets. Percentages are calculated as of month end. Page 10

12 Net Asset Flow - Asset Class* - All As of June 30, 2013 June 30, 2013 Equities 67.3% Fixed Income 20.1% Mutual 14.4% Money Market -0.5% Options -1.2% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% This chart illustrates the percent of total net flows within each asset class over the three month period ending June 30, Net flow percentages are calculated by adding the purchases and sales amounts within each respective asset class and dividing by the total net flows over the period. Page 11

13 Net Asset Flow - All Categories* - All As of June 30, 2013 June 30, 2013 MF - Taxable % Equities - Other Equities - Mut -7.70% MF - Asset Allocation Money Marke -0.50% Equities - Tele -0.10% MF - International MF - Tax MF Free - Large Cap 0.10% Stock Equities - Utili Equities 0.10% - Materials MF - Other 0.40% MF - Small Cap Stock MF - Specializ 0.90% Equities - Info Equities 1.60% - Industrials Equities - Con 1.90% Equities - Energy Equities - Con 2.10% Equities - Health Care Equities - Fina 3.50% Equities - Hea Equities 4.90% - Financials Equities Equities - Ene - Consumer 5.30% Discretionary Equities - Indu 6.70% Equities - Consumer Staples MF - Small Ca 7.80% Equities - Mat Equities % Info Technology MF - Large Ca 14.70% MF - Specialized MF - Internatio 14.90% MF - Other MF - Asset Al 16.50% Equities - Oth 39.60% Equities - Utilities MF - Tax Free Bond 9.5% 7.8% 6.7% 5.3% 4.9% 3.5% 2.1% 1.9% 1.6% 0.9% 0.4% 0.1% 0.1% 16.5% 14.9% 14.7% 39.6% Equities - Telecomm Services -0.1% Money Market -0.5% Equities - Mutual -7.7% MF - Taxable Bond -40.9% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% This chart illustrates the percent of total net flows within each investment category, as classified by Standard & Poor s and Morningstar Inc., over the three month period ending June 30, Net flow percentages are calculated by adding the purchases and sales amounts within each respective investment category and dividing by the total net flows over the period. Page 12

14 Endnotes *Data for the Participant Profile and Age Band charts is based on the PCRA participant population (approximately 40,683 accounts) of only Schwab Retirement Plan Services, Inc. Data for all other charts is based on all PCRAs in Schwab s entire PCRA participant population that have an account balance between $5,000 and $2 million (approximately 173,510 accounts). All data contained herein is for information purposes only and may not be copied, assigned, transferred, disclosed, or utilized without the express written approval of Schwab. Data is gathered for these reports from what we believe to be reliable sources; however, Schwab does not guarantee the accuracy, timeliness or completeness of the information. Charles Schwab & Co., Inc. is a registered broker-dealer, offering the Schwab Personal Choice Retirement Account (PCRA), as well as other brokerage and custody services, to its customers. The Charles Schwab Corporation (Charles Schwab) provides services to retirement other benefit plans and participants as well as equity compensation plan services and other financial and retirement services to corporations and executives through its separate but affiliated companies and subsidiaries, Schwab Retirement Plan Services, Inc.; Schwab Retirement Plan Company; Charles Schwab Bank; and Charles Schwab & Co., Inc. Brokerage products and services are offered by Charles Schwab & Co., Inc. (Member SIPC). FOR INSTITUTIONAL PURPOSES ONLY Charles Schwab & Co., Inc. (Member SIPC). All rights reserved. ( )