401(k) investors were light traders in the fourth quarter, according to the Alight Solutions 401(k) IndexTM. There was one day of above-normal trading, bringing the total to three for the entire year. Net trading activity slightly favored fixed income, with over 60% of days favoring moving money into stable value, money market, and bond funds.
Fourth quarter observations:
- Net transfers for the quarter were 0.17% of balances—the second lightest trading quarter on record.
- 39 out of 64 trading days in the fourth quarter had net trading dollars moving from equities to fixed income.
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Alight Solutions 401(k) Index statistics for Q4 2021 and year-to-date: |
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Index statistics |
Q4 2021 |
2021 YTD |
|
Total transfers as percentage of starting balance |
0.17% |
0.53% |
|
# Fixed days |
39 (61%) |
137 (54%) |
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# Equity days |
25 (39%) |
115 (46%) |
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# Above-normal days1 |
1 |
3 |
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Asset classes with most trading inflows in Q4 2021 |
Percentage of inflows |
Index dollar value ($mil) |
|
Stable value funds |
36% |
$163 |
|
Bond funds |
36% |
$162 |
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Specialty/Sector funds |
11% |
$49 |
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Asset classes with most trading outflows in Q4 2021 |
Percentage of outflows |
Index dollar value ($mil) |
|
Company stock |
37% |
$166 |
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Target date funds2 |
26% |
$116 |
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Mid U.S. equity funds |
17% |
$76 |
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Returns for common indices |
Q4 2021 |
2021 YTD |
|
Bloomberg Barclays U.S. Aggregate Index |
0.01% |
-1.54% |
|
S&P 500 Index |
11.03% |
28.71% |
|
Russell 2000 Index |
2.14% |
14.82% |
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MSCI All Country World ex-U.S. Index (net) |
1.82% |
7.82% |
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.
