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

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

December trading saw four above-normal1 days, according to the Alight Solutions 401(k) IndexTM. Investors favored fixed income funds on 14 of 20 days. Bond (43%), stable value (26%) and money market (23%) funds saw the most inflows, while company stock (58%) and target date funds2 (24%) experienced the most outflows. New contributions to equities decreased from 69.1% in November to 68.6% in December.

December observations:

  • On average, 0.01% of 401(k) balances were traded daily.
  • 14 of 20 days favored fixed income funds.

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

Index statistics

December

2023 YTD

Total transfers as percentage of starting balance

0.11%

0.82%

# Fixed days

14 (70%)

155 (62%)

# Equity days

6 (30%)

95 (38%)

# Above-normal1 days

4

14


Inflows and outflows during the month of December:

  • Trading inflows mainly went to bond, stable value and money market funds.
  • Outflows were primarily from company stock, target date2 and mid U.S. equity funds.


Asset classes with most trading 

inflows in December

Percentage of inflows

Index dollar value ($mil)

Bond funds

43%

$113

Stable value funds

26%

$68

Money market funds

23%

$61

Asset classes with most trading 

outflows in December

Percentage of outflows

Index dollar value ($mil)

Company stock

58%

$151

Target date funds2

24%

$62

Mid U.S. equity funds

13%

$35


December investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased from 70.2% in November to 70.5% in December.
  • New contributions to equities decreased from 69.1% in November to 68.6% in December.

Asset classes with largest percentage

of total balance at the end of December

  Percentage of balance

  Index dollar value ($mil)  

Target date funds2

31%

$76,914

Large U.S. equity funds

27%

$67,327

Stable value funds

7%

$17,968

Asset classes with most 

contributions in December

Percentage of contributions

Index dollar value($mil)

Target date funds2

51%

$656

Large U.S. equity funds

20%

$260

International equity funds

7%

$90


Returns for common indices

November

2023 YTD

Bloomberg Barclays Capital U.S. Aggregate Bond Index

3.83%

5.53%

S&P 500 Index

4.54%

26.29%

Russell 2000 Index

12.22%

16.93%

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

5.02%

15.62%

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.

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