With volatility returning to Wall Street, 401(k) investors were busy traders in the first quarter of 2022, according to the Alight Solutions 401(k) IndexTM. There were 16 above-normal trading days in the quarter—a stark contrast to the 3 above-normal days seen in 2021. Net transfers as a percentage of starting balances were 0.46%, nearly equal to the percentage seen in the prior twelve months (0.53%). Net trading activity significantly favored fixed income.
First quarter observations:
- 42 out of 62 trading days in the first quarter had net trading dollars moving from equities to fixed income.
- The highest trading days generally occurred on days when stocks fell.
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Alight Solutions 401(k) Index statistics for Q1 2022 and year-to-date: |
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Index statistics |
Q1 2022 |
2022 YTD |
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Total transfers as percentage of starting balance |
0.46% |
0.46% |
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# Fixed days |
42 (68%) |
42 (68%) |
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# Equity days |
20 (32%) |
20 (32%) |
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# Above-normal days |
16 |
16 |
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Asset classes with most trading inflows in Q1 2022 |
Percentage of inflows |
Index dollar value ($mil) |
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Stable value funds |
74% |
$885 |
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Money market funds |
12% |
$145 |
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Bond funds |
8% |
$98 |
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Asset classes with most trading outflows in Q1 2022 |
Percentage of outflows |
Index dollar value ($mil) |
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Target date funds |
44% |
$532 |
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Large U.S. equity funds |
30% |
$364 |
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Company stock |
8% |
$93 |
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Returns for common indices |
Q1 2022 |
2022 YTD |
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Bloomberg Barclays U.S. Aggregate Index |
-5.93% |
-5.93% |
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S&P 500 Index |
-4.60% |
-4.60% |
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Russell 2000 Index |
-7.53% |
-7.53% |
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MSCI All Country World ex-U.S. Index (net) |
-5.44% |
-5.44% |
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.
