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Alight Solutions 401(k) Index™: December 2021 Observations

December continued 2021’s trend of light trading among 401(k) investors, according to the Alight Solutions 401(k) IndexTM. On average, 0.01% of balances were traded daily—in line with the monthly average for the past year.  Over 80% of days saw investors favoring fixed income over equity.

December observations:

  • On average, 0.01% of 401(k) balances were traded daily.
  • 18 of 22 days favored fixed income funds.

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

Index statistics

December

2021 YTD

Total transfers as percentage of starting balance

0.11%

0.53%

# Fixed days

18 (82%)

137 (54%)

# Equity days

4 (18%)

115 (46%)

# Above-normal days1

0

3

Inflows and outflows during the month of December:

  • Trading inflows mainly went to stable value, bond, 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 December

Percentage of inflows 

Index dollar value ($mil) 

Stable value funds

49%

$137

Bond funds

28%

$78

Money market funds

10%

$29

Asset classes with most trading outflows in December

Percentage of outflows 

Index dollar value ($mil) 

Target date funds2

24%

$67

Company stock

23%

$66

Large U.S. equity funds

21%

$59

December investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased from 70.3% in November to 70.7% in December.
  • New contributions to equities decreased from 69.7% in November to 68.3% in December.

Asset classes with largest percentage of total balance at the end of December

Percentage of balance 

Index dollar value ($mil) 

Target date funds

30%

$77,561

Large U.S. equity funds

28%

$72,277

Stable value funds

8%

$20,119

Asset classes with most contributions in December

Percentage of contributions 

Index dollar value ($mil) 

Target date funds

48%

$618

Large U.S. equity funds

20%

$260

International equity funds

7%

$95

Returns for common indices

December

2021 YTD

Bloomberg Barclays U.S. Aggregate Index

-0.26%

-1.54%

S&P 500 Index

4.48%

28.71%

Russell 2000 Index

2.23%

14.82%

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

4.13%

7.82%

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.

Related Insights


Alight Solutions 401(k) Index™

Monthly and quarterly Alight Solutions 401(k) Index Reports

Alight Solutions 401(k) Index: April 2022 Observations

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.

Alight Solutions 401(k) Index™: July 2021 Observations

July was another light month of trading in 401(k) plans, according to the Alight Solutions 401(k) Index TM. Net trading activity in July was 0.07% of balances, a slight increase from 0.06% in June, but well below the trailing five-year average of 0.21%.