Alight Solutions 401k Index: January 2020 Observations

A volatile January on Wall Street prompted 401(k) investors to increase trading, according to the Alight Solutions 401(k) Index™. January had five days of above-normal¹ activity – three more than the combined total of the last four months of 2019.

January observations:

On average, 0.021% of 401(k) balances were traded daily
12 of 21 days favored fixed income funds

Alight Solutions 401(k) Index statistics for January 2020:

Index statistics	January	2020 YTD
Total transfers as percentage of starting balance	0.17%	0.17%
# Fixed days	12 (57%)	12 (57%)
# Equity days	9 (43%)	9 (43%)
# Above-normal days	5	5

Inflows and outflows during January:

Trading inflows mainly went to bond, target date² and international equity funds
Outflows were primarily from stable value, large U.S. equity and small U.S. equity funds

Asset classes with most trading inflows in January

	Percentage of inflows	Index dollar value ($ mil)
Bond funds	77%	$289
Target date funds	12%	$46
International equity funds	7%	$26

Asset classes with most trading outflows in January

	Percentage of outflows	Index dollar value ($ mil)
Stable value funds	39%	$147
Large U.S. equity funds	26%	$99
Small U.S. equity funds	15%	$55

January investment portfolios:

After reflecting market movements and trading activity, average asset allocation in equities decreased from 68.1% in December to 67.7% in January
New contributions to equities increased from 67.4% in December to 68.0% in January

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

	Percentage of balance	Index dollar value ($ mil)
Target date funds	29%	$65,272
Large U.S. equity funds	26%	$57,724
Stable value funds	9%	$20,809

Asset classes with most contributions in January

	Percentage of contribution	Index dollar value ($ mil)
Target date funds	47%	$753
Large U.S. equity funds	20%	$327
International equity funds	7%	$116

January market observations:

January was a volatile month for investors. U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) generated a positive return of 1.9%. U.S. large cap equities (represented by the S&P 500 Index) were flat, international equities (represented by the MSCI All Country World ex-U.S. Index) dropped 2.7% and U.S. small cap equities (represented by the Russell 2000 Index) fell 3.2%.

Returns for common indices

	January	2020 YTD
Bloomberg Barclays U.S. Aggregate Index	1.9%	1.9%
S&P 500 Index	0.0%	0.0%
Russell 2000 Index	-3.2%	-3.2%
MSCI All Country World ex-U.S. Index (net)	-2.7%	-2.7%

Members of the media: please contact Landis Cullen 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. The amount in the target risk funds is less than 10% of the total.