February was another light trading month for 401(k) investors, according to the Alight 401(k) IndexTM. There were no above-normal1 trading days and, on average, just 0.01% of balances were traded daily. Bond funds had the most net inflows, while stable value funds had the most net outflows. New contributions to equities increased slightly to 68.3%.
February observations:
- On average, 0.01% of 401(k) balances were traded daily.
- 8 of 19 days favored equity funds.
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Inflows and outflows during the month of February:
- Trading inflows mainly went to bond, large U.S. equity and mid U.S. equity funds.
- Outflows were primarily from stable value and target date funds.2
Asset classes with most trading inflows in February | Percentage of inflows | Index dollar value ($mil) |
Bond funds | 48% | $110 |
Large U.S. equity funds | 19% | $44 |
| Mid U.S. equity funds | 16% | $36 |
Asset classes with most trading outflows in February | Percentage of outflows | Index dollar value($mil) |
Stable value funds | 54% | $123 |
Target date funds2 | 33% | $76 |
February investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities decreased from 68.9% in January to 68.7% in February.
- New contributions to equities increased from 68.2% in January to 68.3% in February.
Asset classes with largest percentage of total balance at the end of February | Percentage of balance | Index dollar value ($mil) |
Target date funds2 | 30% | $69,744 |
Large U.S. equity funds | 26% | $59,786 |
Stable value funds | 9% | $20,946 |
Asset classes with most contributions in February | Percentage of contributions | Index dollar value($mil) |
Target date funds2 | 47% | $779 |
Large U.S. equity funds | 21% | $354 |
International equity funds | 7% | $111 |
February market observations:
Returns for common indices | February | 2023 YTD |
Bloomberg Barclays U.S. Aggregate Index | -2.59% | 0.41% |
S&P 500 Index | -2.44% | 3.69% |
Russell 2000 Index | -1.69% | 7.89% |
MSCI All Country World ex-U.S. Index (net) | -3.51% | 4.32% |
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.
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