February was a light trading month for 401(k) investors, according to the Alight Solutions 401(k) IndexTM. There were no days of above-normal1 activity. Monthly net transfers as a percentage of balances was 0.15%, down from 0.21% in January.
- Average net trading activity was 0.016% of 401(k) balances, down from 0.024% in January.
- Four days favored fixed income funds and 15 days favored equity funds.
Alight Solutions 401(k) Index statistics for February 2021:
|Index statistics||February||2021 YTD|
|Total transfers as percentage of starting balance||0.15%||0.31%|
|# Fixed days||4 (21%)||14 (37%)|
|# Equity days||15 (79%)||24 (63%)|
|# Above-normal days||0||1|
Inflows and outflows during the month of February:
- Trading inflows mainly went to small U.S. equities, mid U.S. equities and emerging markets.
- Outflows were primarily company stock, stable value and bond funds.
Asset classes with most trading inflows in February
|Percentage of inflows||Index dollar value ($ mil)|
|Small U.S. equities||33%||$125|
|Mid U.S. equities||26%||$99|
Asset classes with most trading outflows in February
|Percentage of outflows||Index dollar value ($ mil)|
February investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities increased from 67.6% in January to 68.3% in February.
- New contributions to equities increased from 68.3% in January to 68.6% in February.
Asset classes with largest percentage of total balance at end of February
|Percentage of balance||Index dollar value ($ mil)|
|Target date funds2||30%||$73,985|
|Large U.S. equity funds||25%||$61,952|
|Stable value funds||9%||$21,501|
Asset classes with most contributions in February
|Percentage of contributions||Index dollar value ($ mil)|
|Target date funds||44%||$731|
|Large U.S. equity funds||21%||$350|
|International equity funds||8%||$127|
Returns for common indices
|Bloomberg Barclays U.S. Aggregate Index||-1.4%||-2.2%|
|S&P 500 Index||2.8%||1.7%|
|Russell 2000 Index||6.2%||11.6%|
|MSCI All Country World ex-U.S. Index (net)||2.0%||2.2%|
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 two times the average daily net activity of the preceding 12 months.
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.