Early HSA Investment Trends Amidst COVID-19 Pandemic

  • May 29, 2020

As HSA investment accountholders react to the financial and public health impact of the COVID-19 pandemic, Devenir has observed HSA investors to better understand how the crisis has shaped their investment behavior. The HSA investor insights you will find below have been compiled using transactional data from January 1st to April 30th for 2019 and 2020.

Highlights from the Analysis

  • 25% of HSA investors transferred dollars to their investment account through April 2020 compared to 23% the year prior.
  • Modern plan designs have encouraged HSA investors to stay put during the COVID-19 pandemic, only 3.6% of accounts have been rebalanced, (excluding automatic, prescheduled rebalancing).
  • Accounts that have rebalanced have moved assets out of asset classes typically perceived as higher risk (Small Cap, International) and into perceived safer asset classes (Fixed Income).

Investment Account Funding

With ongoing market volatility, HSA investors have generally been less active moving money between their HSA’s investment and deposit component compared to 2019. Through April, the number of transfers to investments and the number of transfers out of investments both fell (-14% and -25% respectively).

1/1/19 – 4/30/19 vs. 1/1/20 – 4/30/20 YoY % Change
Transfers to Investments ($) -9%
Transfers out of Investments ($) 24%
Transfers to Investments (#) -14%
Transfers out of Investments (#) -25%

Note: “Transfers to investments ($)” represents the dollar value of all transfers to the investment account during the period. “Transfers to investments (#)” represents the number of transfers to the investment account, such that each transfer equals “1” regardless of dollar value.

However, we continue to see the total number of transfers to investments outpace the number of transfers out of investments. In 2020, we have seen about 9 requests to move money into investments for every request to move money out of investments. Through April of 2020, we saw 25% of HSA investors move money into investments, compared to 23% during the same period a year prior. We believe these actions help demonstrate that even during a period of dramatic market fluctuations, HSA investors continue to recognize the unique tax advantages of an HSA.

Portfolio Activity

When looking at how active HSA investors are in realigning their holdings, we have not seen a significant change in activity levels from previous years. Similar to what others have reported in the 401(k) space, only a small portion of HSA investment accountholders have deviated from their existing allocations during the beginning of 2020 – a positive sign modern plan designs may be encouraging investors to weather short-term volatility.

1/1/20 – 4/30/20
% of Investors manually realigning portfolios 3.6%

Note: “Transfers to investments ($)” represents the dollar value of all transfers to the investment account during the period. “Transfers to investments (#)” represents the number of transfers to the investment account, such that each transfer equals “1” regardless of dollar value.

We have however seen a change in demand across asset classes, with HSA investment dollars having flowed out of riskier asset classes like Small Cap and International, and into safer Fixed Income assets so far in 2020.

2020 2019
Transfers Out Transfers In Transfers Out Transfers In
Large Cap 26% 26% 31% 29%
Mid Cap 7% 6% 5% 8%
Small Cap 9% 5% 11% 12%
International 6% 3% 9% 6%
Multi-Asset 11% 11% 12% 15%
Fixed Income 38% 46% 30% 28%
Other 3% 3% 2% 2%

Note: Percentages represent the percent of total dollar value of transfers in or out of an individual asset class during the period.

We remain dedicated to observing HSA accountholder behavior during this unusual time, please reach out to research@devenir.com if you have questions, comments, or would like to share your feedback.


Investments are not FDIC Insured and may lose value. The information above is intended to be used for educational purposes only and is not to be construed as investment or tax advice, or as tailored to any specific investor. Consult a financial advisor or tax professional for more information. Data used may be estimates and may not reflect actual observed data. Individual statistics have been generated using the best available data set which may not reconcile with other statistics in past or future reports.