See-sawing stock prices in the third quarter of 2022 had 401(k) plan investors trading in starts and stops, according to the Alight Solutions 401(k) IndexTM. As Wall Street was posting gains at the beginning of the quarter, trading was light and saw trades moving money to equities. However, as stocks slid in the second half, trading activity increased and money flowed to fixed income. There were 5 above-normal1 trading days in the quarter, down from 17 above-normal days seen in Q2.
Third quarter observations:
- Net transfers for the quarter were 0.24% of balances.
- 42 out of 64 trading days had net trading dollars moving from equities to fixed income.
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Alight Solutions 401(k) Index™ statistics for Q3 2022 and year-to-date: |
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Index statistics |
Q3 2022 |
2022 YTD |
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Total transfers as percentage of starting balance |
0.24% |
1.04% |
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# Fixed days |
42 (66%) |
135 (72%) |
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# Equity days |
22 (34%) |
53 (28%) |
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# Above-normal1 days |
5 |
38 |
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Asset classes with most trading inflows in Q3 2022 |
Percentage of inflows |
Index dollar value ($mil) |
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Stable value funds |
68% |
$350 |
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Money market funds |
17% |
$87 |
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Bond funds |
8% |
$43 |
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Asset classes with most trading outflows in Q3 2022 |
Percentage of outflows |
Index dollar value ($mil) |
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Target date funds2 |
65% |
$334 |
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Small U.S. equity funds |
10% |
$52 |
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Mid U.S. equity funds |
10% |
$51 |
Third quarter market observations:
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Returns for common indices |
Q3 2022 |
2022 YTD |
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Bloomberg Barclays U.S. Aggregate Index |
-4.75% |
-14.61% |
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S&P 500 Index |
-4.88% |
-23.87% |
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Russell 2000 Index |
-2.19% |
-25.10% |
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MSCI All Country World ex-U.S. Index (net) |
-9.91% |
-26.50% |
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.
