Retirement plan investors were generally light traders in December, according to the Alight 401(k) IndexTM. There were just two above-normali trading days with one occurring on December 18, the day the Federal Reserve lowered interest rates and major stock indices fell by 2.5% or more. Net trading was over five times that of a normal day on December 18.
December observations:
- On average, 0.011% of 401(k) balances were traded daily.
- 14 of 21 days favored equity funds.
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Inflows and outflows during the month of December:
- Trading inflows mainly went to bond, large U.S. equity and international equity funds.
- Outflows were primarily from target dateii, stable value and emerging markets funds.
Asset classes with most trading inflows in December | Percentage of inflows | Index dollar value ($mil) |
| Bond funds | 36% | $154 |
| Large U.S. equity funds | 19% | $79 |
| International equity funds | 18% | $76 |
Asset classes with most trading outflows in December | Percentage of outflows | Index dollar value ($mil) |
Target date fundsii | 75% | $316 |
Stable value funds | 19% | $79 |
| Emerging markets funds | 5% | $23 |
December investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities decreased from 72.7% in November to 72.4% in December.
- New contributions to equities increased from 69.3% in November to 69.5% in December.
Asset classes with largest percentage of total balance at the end of December | Percentage of balance | Index dollar value ($mil) |
Target date fundsii | 31% | $82,908 |
Large U.S. equity funds | 30% | $79,608 |
Company stock funds | 7% | $18,483 |
Asset classes with most contributions in December | Percentage of contributions | Index dollar value($mil) |
Target date fundsii | 51% | $611 |
Large U.S. equity funds | 22% | $258 |
International equity funds | 7% | $80 |
Returns for common indices | December | 2024 YTD |
Bloomberg Barclays U.S. Aggregate Bond Index | -1.64% | 1.25% |
S&P 500 Index | -2.38% | 25.02% |
Russell 2000 Index | -8.26% | 11.54% |
MSCI All Country World ex-U.S. Index (net) | -1.94% | 5.53% |
i 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.
ii 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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