Against the backdrop of a volatile stock market, 401(k) investors were busy traders in January, according to the Alight Solutions 401(k) IndexTM. An average of 0.017% of balances were traded daily, the highest level since January 2021. January 2022 had 5 above-normal1 trading days—a stark increase from the 3 days seen in all of 2021. Two-thirds of days saw investors favoring moving assets into fixed income over equity.
January observations:
- On average, 0.017% of 401(k) balances were traded daily.
- 13 of 20 days favored fixed income funds.
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The Alight Solutions 401(k) Index statistics for the month of January: |
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Index statistics |
January |
2022 YTD |
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Total transfers as percentage of starting balance |
0.15% |
0.15% |
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# Fixed days |
13 (65%) |
13 (65%) |
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# Equity days |
7 (35%) |
7 (35%) |
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# Above-normal days |
5 |
5 |
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Inflows and outflows during the month of January:
- Trading inflows mainly went to stable value, bond, and money market funds.
- Outflows were primarily from target date, large U.S. equity, and mid U.S. equity funds.
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Asset classes with most trading inflows in January |
Percentage of inflows |
Index dollar value ($mil) |
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Stable value funds |
61% |
$240 |
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Bond funds |
16% |
$62 |
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Money market funds |
11% |
$45 |
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Asset classes with most trading outflows in January |
Percentage of outflows |
Index dollar value ($mil) |
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Target date funds |
44% |
$174 |
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Large U.S. equity funds |
36% |
$141 |
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Mid U.S. equity funds |
12% |
$46 |
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January investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities decreased from 70.7% in December to 70.0% in January.
- New contributions to equities increased from 68.3% in December to 70.1% in January.
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Asset classes with largest percentage of total balance at the end of January |
Percentage of balance |
Index dollar value ($mil) |
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Target date funds |
30% |
$75,087 |
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Large U.S. equity funds |
27% |
$67,916 |
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Stable value funds |
8% |
$20,364 |
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Asset classes with most contributions in January |
Percentage of contributions |
Index dollar value ($mil) |
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Target date funds |
46% |
$751 |
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Large U.S. equity funds |
21% |
$353 |
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International equity funds |
8% |
$130 |
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Returns for common indices |
January |
2022 YTD |
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Bloomberg Barclays U.S. Aggregate Index |
2.15% |
2.15% |
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S&P 500 Index |
5.17% |
5.17% |
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Russell 2000 Index |
9.63% |
9.63% |
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MSCI All Country World ex-U.S. Index (net) |
3.69% |
3.69% |
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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.
