A news release from Charles Schwab Corporate and Retirement Services with four-quarter and year-end results indicated that there was significant asset class shift at year-end 2008 compared to a year earlier. There was a 10% increase in cash and equivalents and a doubling of fixed income from 3% to 6%. Mutual funds took the biggest hit dropping to 38% of total assets in the fourth quarter, down 5% from last quarter and down 10% year over year.
The release also said the percentage of asset allocation funds and taxable bond funds climbed steadily with increases ranging from 3% to 7% to close out the year in 2008. With the recent asset in flows to these funds, taxable bond funds replaced small-cap stock funds as the third largest mutual fund sector in Schwab’s SDBA program, at 18%.
Large-cap funds remained the largest mutual fund sector at 32%, even though the sector experienced a 3% decrease for 2008.