Alight Solutions 401(k) Index: November 2020 Observations

With the S&P 500 posting its best November ever, 401(k) investors resumed trading into equities, according to the Alight Solutions 401(k) Index^TM. There were nine days in November where net trades went from fixed income to equities—a sharp contrast from October that had no such days. Overall, investors had 66.9% of balances in equities at the end of November, the highest value since January 2020 before the COVID-19 pandemic.

November observations:

On average, 0.024% % of 401(k) balances were traded daily
11 of 20 days favored fixed income funds
3 above-normal¹ days of trading activity

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

Index statistics	November	2020 YTD
Total transfers as percentage of starting balance	0.16%	3.51%
# Fixed days	11 (55%)	173 (75%)
# Equity days	9 (45%)	58 (25%)
# Above-normal days	3	47

Inflows and outflows during November:

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

Asset classes with most trading inflows in November

	Percentage of inflows	Index dollar value ($ mil)
Bond funds	61%	$219
Stable value funds	19%	$66
Target date funds	8%	$28

Asset classes with most trading outflows in November

	Percentage of outflows	Index dollar value ($ mil)
Company stock	47%	$167
Large U.S. equity funds	20%	$72
Balanced funds	13%	$46

November investment portfolios:

After reflecting market movements and trading activity, average asset allocation in equities increased from 65.4% in October to 66.9% in November
New contributions to equities increased from 67.2% in October to 67.3% in November

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

	Percentage of balance	Index dollar value ($ mil)
Target date funds	29%	$69,800
Large U.S. equity funds	25%	$61,144
Stable value funds	10%	$22,969

Asset classes with most contributions in November

	Percentage of contributions	Index dollar value ($ mil)
Target date funds	47%	$479
Large U.S. equity funds	20%	$204
International equity funds	7%	$72

November market observations:

All indices gained in November with all equities reaching double digit returns. U.S. small equity (represented by the Russell 2000 Index) up 18.4%, international equity (represented by the MSCI All Country World ex-U.S. Index) rose 13.5%, and U.S. large equity (represented by the S&P 500 Index) up 11.0%. U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) also gained 1.0%.

Returns for common indices

	November	2020 YTD
Bloomberg Barclays U.S. Aggregate Index	1.0%	7.4%
S&P 500 Index	11.0%	14.0%
Russell 2000 Index	18.4%	10.4%
MSCI All Country World ex-U.S. Index (net)	13.5%	5.0%

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.