With volatility in the equity markets, 401(k) investors were active but cautious traders, according to the Alight 401(k) IndexTM. Twelve of the 21 days had above-normal1 trading activity, but no day exceeded 3 times average. All but 3 days in the month saw net trading activity moving money from equities to fixed income.
May observations:
- On average, 0.018% of 401(k) balances were traded daily.
- 18 of 21 days favored fixed income funds.
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The Alight Solutions 401(k) Index statistics for the month of May: |
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Index statistics |
May |
2022 YTD |
|
Total transfers as percentage of starting balance |
0.22% |
0.70% |
|
# Fixed days |
18 (86%) |
75 (73%) |
|
# Equity days |
3 (14%) |
28 (27%) |
|
# Above-normal days |
12 |
28 |
Inflows and outflows during the month of May:
- Trading inflows mainly went to stable value, money market and self-directed window funds.
- Outflows were primarily from target date2, large U.S. equity and bond funds.
|
Asset classes with most trading inflows in May |
Percentage of inflows |
Index dollar value ($mil) |
|
Stable value funds |
85% |
$442 |
|
Money market funds |
12% |
$60 |
|
Self-directed window funds |
3% |
$16 |
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Asset classes with most trading outflows in May |
Percentage of outflows |
Index dollar value ($mil) |
|
Target date funds2 |
42% |
$216 |
|
Large U.S. equity funds |
23% |
$121 |
|
Bond funds |
14% |
$73 |
May investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities decreased from 69.1% in April to 68.8% in May.
- New contributions to equities decreased from 69.5% in April to 69.0% in May.
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Asset classes with largest percentage of total balance at the end of May |
Percentage of balance |
Index dollar value ($mil) |
|
Target date funds2 |
30% |
$69,680 |
|
Large U.S. equity funds |
26% |
$61,292 |
|
Stable value funds |
9% |
$21,280 |
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Asset classes with most contributions in May |
Percentage of contributions |
Index dollar value ($mil) |
|
Target date funds2 |
48% |
$548 |
|
Large U.S. equity funds |
21% |
$241 |
|
International equity funds |
7% |
$82 |
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Returns for common indices |
May |
2022 YTD |
|
Bloomberg Barclays U.S. Aggregate Index |
0.6% |
-8.9% |
|
S&P 500 Index |
0.2% |
-12.8% |
|
Russell 2000 Index |
0.2% |
-16.6% |
|
MSCI All Country World ex-U.S. Index (net) |
0.7% |
-10.7% |
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.
