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.
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The Alight Solutions 401(k) Index statistics for the month of December: |
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Index statistics |
December |
2021 YTD |
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Total transfers as percentage of starting balance |
0.11% |
0.53% |
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# Fixed days |
18 (82%) |
137 (54%) |
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# Equity days |
4 (18%) |
115 (46%) |
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# 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.
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Asset classes with most trading inflows in December |
Percentage of inflows |
Index dollar value ($mil) |
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Stable value funds |
49% |
$137 |
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Bond funds |
28% |
$78 |
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Money market funds |
10% |
$29 |
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Asset classes with most trading outflows in December |
Percentage of outflows |
Index dollar value ($mil) |
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Target date funds2 |
24% |
$67 |
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Company stock |
23% |
$66 |
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Large U.S. equity funds |
21% |
$59 |
December investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities increased from 70.3% in November to 70.7% in December.
- New contributions to equities decreased from 69.7% in November to 68.3% in December.
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Asset classes with largest percentage of total balance at the end of December |
Percentage of balance |
Index dollar value ($mil) |
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Target date funds |
30% |
$77,561 |
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Large U.S. equity funds |
28% |
$72,277 |
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Stable value funds |
8% |
$20,119 |
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Asset classes with most contributions in December |
Percentage of contributions |
Index dollar value ($mil) |
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Target date funds |
48% |
$618 |
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Large U.S. equity funds |
20% |
$260 |
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International equity funds |
7% |
$95 |
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Returns for common indices |
December |
2021 YTD |
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Bloomberg Barclays U.S. Aggregate Index |
-0.26% |
-1.54% |
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S&P 500 Index |
4.48% |
28.71% |
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Russell 2000 Index |
2.23% |
14.82% |
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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.
