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Alight Solutions 401(k) Index: Third Quarter 2021 Observations

There was little trading activity among 401(k) investors in the third quarter, according to the Alight Solution's 401(k) IndexTM. There were no days of above-normal1 trading activity. When trades occurred, they generally saw money moving to more conservative investments, with 84% of the days favoring fixed income.


        
Third quarter observations:        

  • Net transfers for the quarter were 0.30% of balances. While this is nearly double the second quarter's record low, it is roughly half of the average quarterly's value for 2015-2020.  
  • 54 out of 64 trading days in the third quarter had net trading dollars moving from equities to fixed income.

 

The Alight Solutions 401(k) Index statistics for Q3 2021 and year to date:

Index statistics

Q3 2021

2021 YTD

Total transfers as percentage of starting balance

0.30%

0.51%

# Fixed days

54 (84%)

98 (52%)

# Equity days

10 (16%)

90 (48%)

# Above-normal days

0

2

 

Asset classes with most trading inflows in Q4 2021

 

Percentage of inflows

 

Index dollar value ($mil)

Stable value funds

44%

$355

Bond funds

32%

$261

Money market funds

11%

$90

 

Asset classes with most trading outflows in Q4 2021

 

Percentage of outflows

 

Index dollar value ($mil)

Large U.S. equity funds

30%

$240

Small U.S. equity funds

23%

$183

Mid U.S. equity funds

20%

$161

 

Returns for common indices

Q2 2021

2021 YTD

Bloomberg Barclays U.S. Aggregate Index

0.1%

-1.6%

S&P 500 Index

0.6%

15.9%

Russell 2000 Index

-4.4%

12.4%

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

-3.0%

5.9%

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.

Related Insights


Alight Solutions 401(k) Index™

Monthly and quarterly Alight Solutions 401(k) Index Reports

Alight Solutions 401(k) Index™: September 2021 Observations

September was a light month for 401(k) trading, according to the Alight Solutions 401(k) Index.