Despite equity markets posting their worst month in over 2 years, 401(k) investors were not making reactionary trades. There were no above-normal1 days in April. However, net transfers in April were up slightly compared to March (.10% vs .09%) as investors moved money out of equities and into fixed income.
April observations:
- On average, 0.011% of 401(k) balances were traded daily.
- 15 of 20 days favored fixed income funds.
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The Alight Solutions 401(k) Index statistics for the month of April: |
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Index statistics |
April |
2022 YTD |
|
Total transfers as percentage of starting balance |
0.1% |
0.54% |
|
# Fixed days |
15 (75%) |
57 (70%) |
|
# Equity days |
5 (25%) |
25 (30%) |
|
# Above-normal days |
0 |
16 |
Inflows and outflows during the month of April:
- Trading inflows mainly went to stable value, specialty/sector and money market funds.
- Outflows were primarily from target date, small U.S. equity and company stock funds.
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Asset classes with most trading inflows in April |
Percentage of inflows |
Index dollar value ($mil) |
|
Stable value funds |
62% |
$155 |
|
Specialty/sector funds |
13% |
$32 |
|
Money market funds |
10% |
$26 |
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Asset classes with most trading outflows in April |
Percentage of outflows |
Index dollar value ($mil) |
|
Target date funds2 |
70% |
$175 |
|
Small U.S. equity funds |
11% |
$28 |
|
Company stock |
8% |
$21 |
April investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities decreased from 69.9% in March to 69.1% in April.
- New contributions to equities decreased from 69.7% in March to 69.5% in April.
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Asset classes with largest percentage of total balance at the end of April |
Percentage of balance |
Index dollar value ($mil) |
|
Target date funds2 |
30% |
$69,553 |
|
Large U.S. equity funds |
26% |
$61,533 |
|
Stable value funds |
9% |
$20,935 |
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Asset classes with most contributions in April |
Percentage of contributions |
Index dollar value |
|
Target date funds2 |
49% |
$640 |
|
Large U.S. equity funds |
21% |
$273 |
|
International equity funds |
7% |
$90 |
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Returns for common indices |
April |
2022 YTD |
|
Bloomberg Barclays U.S. Aggregate Index |
-3.8% |
-9.5% |
|
S&P 500 Index |
-8.7% |
-12.9% |
|
Russell 2000 Index |
-9.9% |
-16.7% |
|
MSCI All Country World ex-U.S. Index (net) |
-6.3% |
-11.4% |
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.
