January was a busy trading month for 401(k) investors, according to the Alight Solutions 401(k) IndexTM. There were 10 above-normal1 days, and 0.28% of balances were traded--the highest monthly total since October 2020. Target date funds2 accounted for 90% of all net trading outflows.
January observations:
- On average, 0.018% of 401(k) balances were traded daily.
- 13 of 20 days favored equity funds.
| |||||||||||||||||||||||
Inflows and outflows during the month of January:
- Trading inflows mainly went to large U.S. equity, bond and international equity funds.
- Net outflows were almost exclusively from target date funds2.
Asset classes with most trading inflows in January | Percentage of inflows | Index dollar value ($mil) |
| Large U.S. equity funds | 39% | $288 |
| Bond funds | 22% | $161 |
| International equity funds | 19% | $142 |
Asset classes with most trading outflows in January | Percentage of outflows | Index dollar value ($mil) |
Target date funds2 | 90% | $670 |
January investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities increased from 72.4% in December to 72.8% in January.
- New contributions to equities increased from 69.3% in December to 71.7% in January.
Asset classes with largest percentage of total balance at the end of January | Percentage of balance | Index dollar value ($mil) |
Target date funds2 | 31% | $84,851 |
Large U.S. equity funds | 30% | $82,327 |
Company stock funds | 7% | $19,138 |
Asset classes with most contributions in January | Percentage of contributions | Index dollar value($mil) |
Target date funds2 | 45% | $920 |
Large U.S. equity funds | 25% | $524 |
International equity funds | 6% | $133 |
Returns for common indices | January | 2025 YTD |
Bloomberg Barclays U.S. Aggregate Bond Index | 0.53% | 0.53% |
S&P 500 Index | 2.78% | 2.78% |
Russell 2000 Index | 2.62% | 2.62% |
MSCI All Country World ex-U.S. Index (net) | 4.03% | 4.03% |
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.
Want to know more?
Check out our previous reports
