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Alight Solutions 401(k) Index™: March 2020 observations

A tumbling stock market throughout March spurred 401(k) investors to trade at record-high levels, according to the Alight Solutions 401(k) Index™. Total transfers as a percentage of the starting balance was the highest since October 2008. March had 18 above-normal1 days of trading activity – the most above-normal days in a month in the more than 20-year history of the 401(k) Index.

March observations:

  • On average, 0.079% of 401(k) balances were traded daily
  • 15 of 22 days favored fixed income funds

 

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

Index statistics March 2020 YTD
Total transfers as percentage of starting balance 0.96% 1.59%
# Fixed days 15 (68%) 43 (69%)
# Equity days 7 (32%) 19 (31%)
# Above-normal days 18 29

 

Inflows and outflows during March:

  • Trading inflows overwhelmingly went to stable value, money market and bond funds
  • Outflows were primarily from target date2, large U.S. equity and international equity funds

 

Asset classes with most trading inflows in March

  Percentage of inflows Index dollar value ($ mil)
Stable value funds 64% $1,286
Money market funds 24% $482
Bond funds 6% $119

 

Asset classes with most trading outflows in March

  Percentage of outflows Index dollar value ($ mil)
Target date funds 48% $974
Large U.S. equity funds 29% $591
International equity funds 6% $122

 

March investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities decreased from 66.0% in February to 63.1% in March
  • New contributions to equities decreased from 68.2% in February to 67.3% in March

 

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

  Percentage of balance Index dollar value ($ mil)
Target date funds 29% $54,974
Large U.S. equity funds 24% $45,170
Stable value funds 12% $22,790

 

Asset classes with most contributions in March

  Percentage of contributions Index dollar value ($ mil)
Target date funds 44% $830
Large U.S. equity funds 21% $407
International equity funds 8% $144

 

March market observations:

All benchmark indices fell in March as equity markets experienced elevated levels of volatility. Large U.S. equities (represented by the S&P 500 Index) lost -12.4%, international equities (represented by the MSCI All Country World ex-U.S. Index) dropped -14.5% and small U.S. equities (represented by the Russell 2000 Index) sank -21.7%. Even U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) dipped slightly -0.6% for the month.

 

Returns for common indices

  March 2020 YTD
Bloomberg Barclays U.S. Aggregate Index -0.6% 3.2%
S&P 500 Index -12.4% -19.6%
Russell 2000 Index -21.7% -30.6%
MSCI All Country World ex-U.S. Index (net) -14.5% -23.4%

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.


  1. 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.

  2. 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.

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