Alight Solutions 401k Index: December 2018 Observations

Trading activity in 401(k) plans was up in February as investors responded to market volatility, according to the Alight Solutions 401(k) Index™. Nine of the 19 trading days in February had above-normal¹ trading activity, with the majority occurring in the wake of the market downturn at the beginning of the month. Trades were split between equities and fixed income as investors jockeyed with the market, but the majority of trading dollars flowed from equities to fixed income funds.

February observations:

Net transfers for the month of February were 0.29% of balances
10 out of 19 days favored equity funds; however, the days favoring fixed income had stronger inflows overall

The Alight Solutions 401(k) Index™ statistics for the month of February 2018:

Index statistics	February	2018 YTD
Total transfers as percentage of starting balance	0.29%	0.29%
# Fixed days	9 (47%)	13 (33%)
# Equity days	10 (53%)	27 (67%)
# Above-normal days	9	21

Inflows and outflows during the month:

Trading inflows mainly went to stable value, money market, and bonds
Outflows were primarily from large U.S. equity, target date², and mid U.S. equity funds

Asset classes with most trading inflows in February

	Percentage of inflows	Index dollar value ($ mil)
Stable value funds	58%	$354
Money market funds	17%	$105
Bond funds	11%	$70

Asset classes with most trading outflows in February

	Percentage of outflows	Index dollar value ($ mil)
Large U.S. equity funds	36%	$220
Target date funds	29%	$117
Mid U.S. equity funds	11%	$66

February investment portfolios:

At the end of February, 68.9% of balances were invested in equities, down from 69.5% at the end of January
68.1% of new contributions were invested in equities at the end of February, the same as January

Asset classes with largest percentage of total balance at end of February

	Percentage of balance	Index dollar value ($ mil)
Target date funds	27%	$55,561
Large U.S. equity funds	24%	$49,197
Stable value funds	10%	$20,205

Asset classes with most contributions in February

	Percentage of contributions	Index dollar value ($ mil)
Target date funds	43%	$667
Large U.S. equity funds	19%	$291
International funds	8%	$122

February market observations

After a strong January, all of the equity indices tracked by the Alight 401(k) Index™ experienced corrections during February. The month’s losses were enough to send small U.S. equities (represented by the Russell 2000 Index) into the red for the year. Losses in U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) extended into February, resulting in a year-to-date loss of over 2 percent.

Returns for common indices

	February	2018 YTD
Bloomberg Barclays U.S. Aggregate Index	-1.0%	-2.1%
S&P 500 Index	-3.7%	1.8%
Russell 2000 Index	-3.8%	-1.4%
MSCI All Country World ex-U.S. Index (net)	-4.7%	0.6%

Members of the media: please contact MacKenzie Lucas for questions about the Alight Solutions 401(k) Index™.

Learn more about the Alight Solutions 401(k) Index™ here.

A “normal” level of relative transfer activity is when the net daily movement of participants’ balances as a percent of total 401(k) balances within the Alight Solutions 401(k) Index™ equals between 0.3 times and 1.5 times the average daily net activity of the preceding 12 months. A “high” relative transfer activity day is when the net daily movement exceeds two times the average daily net activity. A “moderate” relative transfer activity day is when the net daily movement is between 1.5 and two times the average daily net activity of the preceding 12 months.
Target date funds also include the amounts in target risk funds for companies who do not have target date funds. The amount in the target risk funds is less than 10% of the total.