After a turbulent first quarter, 401(k) investors had a slower trading month in April, according to the Alight Solutions 401(k) Index™. There were three days of above-normal1 trading activity, all within the first week of the month.
April observations:
- On average, 0.023% of 401(k) balances were traded daily
- 12 of 21 days favored equity funds
Alight Solutions 401(k) Index statistics for April 2020:
| Index statistics | April | 2020 YTD |
|---|---|---|
| Total transfers as percentage of starting balance | 0.13% | 1.66% |
| # Fixed days | 9 (43%) | 52 (63%) |
| # Equity days | 12 (57%) | 31 (37%) |
| # Above-normal days | 3 | 32 |
Inflows and outflows during April:
- Trading inflows mainly went to bond funds, self-directed brokerage windows and money market funds
- Outflows were primarily from target date2, company stock and large U.S. equity funds
Asset classes with most trading inflows in April
| Percentage of inflows | Index dollar value ($ mil) | |
|---|---|---|
| Bond funds | 31% | $80 |
| Self-directed brokerage window | 19% | $47 |
| Money market funds | 18% | $47 |
Asset classes with most trading outflows in April
| Percentage of outflows | Index dollar value ($ mil) | |
|---|---|---|
| Target date funds | 44% | $112 |
| Company stock | 24% | $62 |
| Large U.S. equity funds | 16% | $42 |
April investment portfolios:
- Reflecting market movements and trading activity, average asset allocation in equities increased from 63.1% in March to 64.7% in April
- New contributions to equities decreased slightly from 67.3% in March to 67.2% in April
Asset classes with largest percentage of total balance at end of April
| Percentage of balance | Index dollar value ($ mil) | |
|---|---|---|
| Target date funds | 29% | $59,656 |
| Large U.S. equity funds | 25% | $51,071 |
| Stable value funds | 11% | $22,708 |
Asset classes with most contributions in April
| Percentage of contributions | Index dollar value ($ mil) | |
|---|---|---|
| Target date funds | 46% | $562 |
| Large U.S. equity funds | 21% | $250 |
| International equity funds | 7% | $83 |
April market observations:
All indices delivered positive returns, following the first quarter’s decline. Small U.S. equities (represented by the Russell 2000 Index) rose 13.7%, large U.S. equities (represented by the S&P 500 Index) were up 12.8% and international equities (represented by the MSCI All Country World ex-U.S. Index) gained 7.6%. U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) were also up by 1.8%.
Returns for common indices
| April | 2020 YTD | |
|---|---|---|
| Bloomberg Barclays U.S. Aggregate Index | 1.8% | 5.0% |
| S&P 500 Index | 12.8% | -9.3% |
| Russell 2000 Index | 13.7% | -21.1% |
| MSCI All Country World ex-U.S. Index (net) | 7.6% | -17.6% |
Members of the media: please contact Landis Cullen for questions about the Alight Solutions 401(k) Index™. Learn more about the Alight Solutions 401(k) Index™ here.
