A rising stock market coupled with slow and steady trades into equities brought 401(k) investors to their highest level of equity exposure since 2001, according to the Alight Solutions 401(k) Index. Although April had no days of above-normal1 activity, the month saw nearly all days have net trading activity favor equities over fixed income.
April observations
- Average net trading activity was 0.013% of 401(k) balances—the lowest value since December 2019.
- Four days favored fixed income funds and 17 days favored equity funds.
The Alight Solutions 401(k) Index statistics for the month of April:
|
Index statistics |
April |
2021 YTD |
|
Total transfers as percentage of starting balance |
0.16% |
0.56% |
|
# Fixed days |
4 (19%) |
22 (27%) |
|
# Equity days |
17 (81%) |
60 (73%) |
|
# Above-normal days |
0 |
1 |
Inflows and outflows during the month of April:
- Trading inflows mainly went to large U.S. equities, target date funds and international equities.
- Outflows were primarily from stable value funds, bond funds and money market.
|
Asset classes with most trading inflows in April |
Percentage of inflows |
Index dollar value ($mil) |
|
Large U.S. equities |
44% |
$184 |
|
Target date funds |
17% |
$171 |
|
International equities |
16% |
$68 |
|
Asset classes with most trading outflows in April |
Percentage of outflows |
Index dollar value ($mil) |
|
Stable value |
48% |
$204 |
|
Bond funds |
24% |
$106 |
|
Money market |
13% |
$53 |
April investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities to 69.8% at the end of April, the highest value since June 2001.
- New contributions to equities remained unchanged from March at 69.9%.
|
Asset classes with largest percentage of total balance at the end of April |
Percentage of balance |
Index dollar value ($mil) |
|
Target date funds |
30% |
$78,767 |
|
Large U.S. equity funds |
25% |
$68,516 |
|
Stable value funds |
8% |
$21,166 |
|
Asset classes with most contributions in April |
Percentage of contributions |
Index dollar value ($mil) |
|
Target date funds |
48% |
$715 |
|
Large U.S. equity funds |
20% |
$302 |
|
International equity funds |
7% |
$105 |
April return markets:
|
Returns for common indices |
April |
2021 YTD |
|
Bloomberg Barclays U.S. Aggregate Index |
0.8% |
-2.6% |
|
S&P 500 Index |
5.3% |
11.8% |
|
Russell 2000 Index |
2.1% |
15.1% |
|
MSCI All Country World ex-U.S. Index (net) |
2.9% |
6.5% |
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.
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.
Members of the media: please contact Landis Cullen for questions about the Alight Solutions 401(k) Index™.
