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Alight Solutions 401(k) Index™: December 2022 Observations

With no above-normal1 days in December, 401(k) plan investors closed out 2022 with light trading, according to the Alight Solutions 401(k) IndexTM. December was the second lightest trading month in 2022. Stable value and bond funds topped net inflows, while most outflows came from target date funds2 and company stock. The percentage of new contributions to equities was at its lowest level (66.1%) since December 2016.


December observations:

  • On average, 0.009% of 401(k) balances were traded daily.
  • 18 of 20 days favored fixed income funds.

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

Index statistics

December

2022 YTD

Total transfers as percentage of starting balance

0.09%

1.27%

# Fixed days

18 (90%)

183 (73%)

# Equity days

2 (10%)

67 (27%)

# Above-normal1 days

0

41


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 international equity funds.

Asset classes with most trading

inflows in December

Percentage of inflows

Index dollar value ($mil)

Stable value funds

43%

$93

Bond funds

38%

$83

Money market funds

19%

$42

Asset classes with most trading

outflows in December

Percentage of outflows

Index dollar value($mil)

Target date funds2

44%

$97

Company stock

20%

$44

International equity funds

17%

$37


December investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities decreased from 68.9% in November to 68.2% in December.

  • New contributions to equities decreased from 67.9% in November to 66.1% 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

30%

$66,591

Large U.S. equity funds

26%

$57,348

Stable value funds

10%

$21,324

Asset classes with most

contributions in December

Percentage of contributions

Index dollar value($mil)

Target date funds2

50%

$537

Large U.S. equity funds

19%

$208

International equity funds

7%

$74



December market observations:

Returns for common indices

December

2022 YTD

Bloomberg Barclays U.S. Aggregate Index

-0.45 %

-13.01%

S&P 500 Index

-5.76%

-18.11%

Russell 2000 Index

-6.49%

-20.44%

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

-0.75%

-16.00%

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.

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™: January 2023 Observations

With just one above-normal day in January, 401(k) plan investors began 2023 with light trading, according to the Alight Solutions 401(k) Index™.

Alight Solutions 401(k) Index™: October 2022 Observations

October was another light trading month for 401(k) plan investors, according to the Alight 401(k) Index™.

Alight Solutions 401(k) Index™

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