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December 04, 2019 at 03:36 PM
Millennials allocated a larger percentage of their portfolios to exchange-traded funds and cash during the third quarter than did older investors, according to Charles Schwab’s quarterly report on retirement plan participant investment activity within self-directed brokerage accounts.
The report, released Tuesday, showed that millennials allocated 24% of their portfolios to ETFs, compared with 20% for Gen Xers and 17% for baby boomers, and allocated 16% to cash, compared with 14% and 12% for older investors.
Boomers held approximately 4% of their portfolios in fixed income, followed by 1% for Gen Xers and 0.8% for millennials.
SDBAs are brokerage accounts within retirement plans — including 401(k) and other types of retirement plans — that participants can use to invest in stocks, bonds, ETFs, mutual funds and other securities that are not part of their retirement plan’s core investment offerings.
(Related: 10 Investment Tax Facts You Should Know)
The report included data collected from some 142,000 retirement plan participants with current balances between $5,000 and $10 million in their Schwab Personal Choice Retirement Accounts.
Gen X comprised approximately 42% of SDBA participants, boomers 39% and millennials 13%.
According to the Schwab data, mutual funds held the highest percentage of participant assets during the third quarter, about a 39% allocation by boomers, 36% by Gen Xers and 34% by millennials.
