February was another busy trading month for 401(k) investors, according to the Alight Solutions 401(k) IndexTM. As international political events drove Wall Street lower, 401(k) investors reacted with above-normal trading activity. Net trading saw investors moving assets into fixed income over equity.
February observations:
- On average, 0.02% of 401(k) balances were traded daily.
- 14 of 19 days favored fixed income funds.
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The Alight Solutions 401(k) Index statistics for the month of February: |
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Index statistics |
February |
2022 YTD |
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Total transfers as percentage of starting balance |
0.24% |
0.37% |
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# Fixed days |
14 (74%) |
27 (69%) |
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# Equity days |
5 (26%) |
12 (31%) |
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# Above-normal days |
6 |
11 |
Inflows and outflows during the month of February:
- Trading inflows mainly went to stable value, money market, and bond funds.
- Outflows were primarily from target date, large U.S. equity, and small U.S. equity funds.
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Asset classes with most trading inflows in February |
Percentage of inflows |
Index dollar value ($mil) |
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Stable value funds |
76% |
$464 |
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Money market funds |
14% |
$87 |
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Bond funds |
7% |
$41 |
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Asset classes with most trading outflows in February |
Percentage of outflows |
Index dollar value ($mil) |
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Target date funds |
41% |
$251 |
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Large U.S. equity funds |
36% |
$220 |
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Small U.S. equity funds |
6% |
$38 |
February investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities decreased from 70.0% in January to 69.5% in February.
- New contributions to equities decreased from 70.1% in January to 69.5% in February.
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Asset classes with largest percentage of total balance at the end of February |
Percentage of balance |
Index dollar value ($mil) |
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Target date funds |
30% |
$73,487 |
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Large U.S. equity funds |
27% |
$65,665 |
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Stable value funds |
8% |
$20,747 |
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Asset classes with most contributions in February |
Percentage of contributions |
Index dollar value ($mil) |
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Target date funds |
45% |
$730 |
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Large U.S. equity funds |
22% |
$355 |
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International equity funds |
7% |
$122 |
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Returns for common indices |
February |
2022 YTD |
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Bloomberg Barclays U.S. Aggregate Index |
-1.12% |
-3.25% |
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S&P 500 Index |
-2.99% |
-8.01% |
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Russell 2000 Index |
1.07% |
-8.66% |
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MSCI All Country World ex-U.S. Index (net) |
-1.98% |
-5.59% |
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.
