Retirement investors reacted to a volatile fourth quarter on Wall Street with starts and stops. Following the post-election bump, trading activity was light with a string of over a month of average trading days. However, the late stock stumble, coupled with the Federal Reserve’s rate cut, fueled increased trading in December.
Fourth quarter observations:
- Net transfers for the quarter were 0.29% of balances.
- 34 out of 64 trading days in the fourth quarter had net trading dollars moving from equities to fixed income.
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Asset classes with most trading inflows in Q4 2024 | Percentage of inflows | Index dollar value ($mil) |
| Bond funds | 48% | $375 |
| Large U.S. equity funds | 21% | $167 |
| Money market funds | 14% | $111 |
Asset classes with most trading outflows in Q4 2024 | Percentage of outflows | Index dollar value ($mil) |
Target date fundsii | 59% | $462 |
Stable value funds | 19% | $147 |
| Company stock | 13% | $102 |
Returns for common indices | Q4 2024 | 2024 YTD |
Bloomberg Barclays U.S. Aggregate Bond Index | -3.06% | 1.25% |
S&P 500 Index | 2.41% | 25.02% |
Russell 2000 Index | 0.33% | 11.54% |
MSCI All Country World ex-U.S. Index (net) | -7.60% | 5.53% |
i 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.
ii 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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