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Alight Solutions 401(k) Index™: March 2023 Observations

With only one above-normal1 day, March was a light trading month for 401(k) investors, according to the Alight Solutions 401(k) IndexTM.  Just 0.01% of balances were traded daily. Bond funds had the most net inflows (30%) followed by company stock (25%), while target date funds2 had the most net outflows (48%). New contributions to equities increased slightly to 68.4%.

March observations:

  • On average, 0.01% of 401(k) balances were traded daily.
  • 17 of 23 days favored fixed income funds.

The Alight Solutions 401(k) IndexTM statistics for the month of March:

Index statistics

March

2023 YTD

Total transfers as percentage of starting balance

0.12%

0.23%

# Fixed days

17 (74%)

41 (66%)

# Equity days

6 (26%)

21 (34%)

# Above-normal1 days

1

2


Inflows and outflows during the month of March:

  • Trading inflows mainly went to bond funds, company stock and money market funds.
  • Outflows were primarily from target date funds,2 large U.S. equity and international equity funds.

Asset classes with most trading 

inflows in March

Percentage of inflows

Index dollar value ($mil)

Bond funds

30%

$84

Company stock

25%

$68

Money market funds

22%

$61

Asset classes with most trading 

outflows in March

Percentage of outflows

Index dollar value ($mil)

Target date funds2

48%

$133

Large U.S. equity funds

28%

$77

International equity funds

8%

$21


March investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased from 68.7% in February to 68.8% in March.
  • New contributions to equities increased from 68.3% in February to 68.4% in March.

Asset classes with largest percentage 

of total balance at the end of March 

  Percentage of balance

  Index dollar value ($mil)  

Target date funds2

31%

$69,181

Large U.S. equity funds

26%

$59,073

Stable value funds

9%

$19,974

Asset classes with most 

contributions in March

Percentage of contributions

Index dollar value($mil)

Target date funds2

45%

$1046

Large U.S. equity funds

21%

$494

International equity funds

8%

$179



March market observations:

Returns for common indices

March

2023 YTD

Bloomberg Barclays U.S. Aggregate Index

2.54%

2.96%

S&P 500 Index

3.67%

7.50%

Russell 2000 Index

-4.78%

2.74%

MSCI All Country World ex-U.S. Index (net)

2.44%

6.87%

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.

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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