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Alight Solutions 401(k) Index™: January 2021 observations

An up-and-down month on Wall Street saw 401(k) investors mostly stay the course in January, according to the Alight Solutions 401(k) IndexTM. The only day of above-normal activity1 was on January 6, when investors rushed out of large U.S. equity funds amid events at the U.S. Capitol.  One-out-of-every-six net trading outflows for the month from large U.S. equity funds occurred on January 6.

January observations:

  • Average net trading activity was 0.024% of 401(k) balances, up from 0.015% in December
  • Nine days favored equity funds and 10 days favored fixed income funds


Alight Solutions 401(k) Index statistics for January 2021:

Index statistics January 2021 YTD
Total transfers as percentage of starting balance 0.21% 0.21%
# Fixed days 10 (53%) 10 (53%)
# Equity days 9 (47%) 9 (47%)
# Above-normal days 1 1


Inflows and outflows during the month of January:

  • Trading inflows mainly went to stable value, target date2 and emerging markets funds
  • Outflows were primarily from large U.S. equity funds and company stock


Asset classes with most trading inflows in January

  Percentage of inflows Index dollar value ($ mil)
Stable value 37% $184
Target date funds 15% $72
Emerging markets 14% $69


Asset classes with most trading outflows in January

  Percentage of outflows Index dollar value ($ mil)
Large U.S. equities 71% $354
Company stock 27% $132


January investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities decreased slightly from 67.7% in December to 67.6% in January
  • New contributions to equities increased from 67.3% in December to 68.3% in January


Asset classes with largest percentage of total balance at end of January

  Percentage of balance Index dollar value ($ mil)
Target date funds 30% $72,490
Large U.S. equity funds 25% $60,216
Stable value funds 9% $21,685


Asset classes with most contributions in January

  Percentage of contributions Index dollar value ($ mil)
Target date funds 47% $715
Large U.S. equity funds 21% $315
International equity funds 7% $112


Returns for common indices

  January 2021 YTD
Bloomberg Barclays U.S. Aggregate Index -0.7% -0.7%
S&P 500 Index -1.0% -1.0%
Russell 2000 Index 5.0% 5.0%
MSCI All Country World ex-U.S. Index (net) 0.2% 0.2%


Members of the media: please contact Landis Cullen for questions about the Alight Solutions 401(k) Index™. 

  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 two 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.

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