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Alight Solutions 401(k) Index™: March 2021 observations

Amid a volatile but rising stock market, 401(k) investors were light traders and content to watch their balances rise, according to the Alight Solutions 401(k) Index. There were no days of above-normal activity.

March observations:

  • Average net trading activity was 0.015% of 401(k) balances, down from 0.016% in February.  This is in sharp contrast to the 0.079% seen last March during the stock selloff at the onset of the COVID-19 pandemic.
  • Four days favored fixed income funds and 19 days favored equity funds.
 
 
The Alight Solutions 401(k) Index statistics for the month of March:
 

Index statistics

March

2021 YTD

Total transfers as percentage of starting balance

0.22%

0.46%

# Fixed days

4 (17%)

18 (30%)

# Equity days

19 (83%)

43 (70%)

# Above-normal days

0

1

 
 
Inflows and outflows during the month of March:
 
  • Trading inflows mainly went to small U.S. equities, target date funds2 and large U.S. equities.
  • Outflows were primarily from bond funds, stable value and company stock.
 

Asset classes with most trading inflows in March

Percentage of Inflows 

Index dollar value ($mil) 

Small U.S. equities

27%

$145

Target date funds

20%

$107

Large U.S. equities

15%

$80

Asset classes with most trading outflows in March

Percentage of Outflows 

Index dollar value ($mil) 

Bond

52%

$284

Stable value

24%

$129

Company stock

14%

$75

 

March investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased from 68.3% in February to 69.0% in March.
  • New contributions to equities increased from 68.6% in February to 69.8% in March.

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

Percentage of Balance 

Index dollar value ($mil) 

Target date funds

30%

$75,761

Large U.S. equity funds

25%

$64,542

Stable value funds

                             8%                       $21,383

 

Asset classes with most contributions in March

Percentage of contributions 

Index dollar value ($mil) 

Target date funds

42%

$816

Large U.S. equity funds

22%

$427

International equity funds

8%

$157

 

March market returns:

Returns for common indices

March

2021 YTD

Bloomberg Barclays U.S. Aggregate Index

-1.25%

-3.37%

S&P 500 Index

4.38%

6.17%

Russell 2000 Index

1.00%

12.70%

MSCI All Country World ex-U.S. Index (net)

1.26%

3.49%

 


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 2 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.

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

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