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Alight Solutions 401(k) Index: April 2022 Observations

Despite equity markets posting their worst month in over 2 years, 401(k) investors were not making reactionary trades.  There were no above-normal1 days in April.  However, net transfers in April were up slightly compared to March (.10% vs .09%) as investors moved money out of equities and into fixed income.
        
April observations:       

  • On average, 0.011% of 401(k) balances were traded daily.
  • 15 of 20 days favored fixed income funds.

The Alight Solutions 401(k) Index statistics for the month of April:

Index statistics

April

2022 YTD

Total transfers as percentage of starting balance

0.1%

0.54%

# Fixed days

15 (75%)

57 (70%)

# Equity days

5 (25%)

25 (30%)

# Above-normal days

0

16

Inflows and outflows during the month of April:

  • Trading inflows mainly went to stable value, specialty/sector and money market funds.
  • Outflows were primarily from target date, small U.S. equity and company stock funds.

Asset classes with most

trading inflows in April

Percentage of inflows

Index dollar value ($mil)

Stable value funds

62%

$155

Specialty/sector funds

13%

$32

Money market funds

10%

$26

Asset classes with most

trading outflows in April

Percentage of outflows

Index dollar value ($mil)

Target date funds2

70%

$175

Small U.S. equity funds

11%

$28

Company stock

8%

$21

April investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities decreased from 69.9% in March to 69.1% in April.
  • New contributions to equities decreased from 69.7% in March to 69.5% in April.

Asset classes with largest percentage of

total balance at the end of April

Percentage of balance

Index dollar value ($mil)

Target date funds2

30%

$69,553

Large U.S. equity funds

26%

$61,533

Stable value funds

9%

$20,935

Asset classes with most

contributions in April

Percentage of contributions

Index dollar value

Target date funds2

49%

$640

Large U.S. equity funds

21%

$273

International equity funds

7%

$90

Returns for common indices

April

2022 YTD

Bloomberg Barclays U.S. Aggregate Index

-3.8%

-9.5%

S&P 500 Index

-8.7%

-12.9%

Russell 2000 Index

-9.9%

-16.7%

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

-6.3%

-11.4%

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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