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% | $37 |
December investment portfolios:
After reflecting market movements and trading activity, average asset allocation in equities decreased from 68.9% in November to 68.2% in December.
New contributions to equities decreased from 67.9% in November to 66.1% in December.
Asset classes with largest percentage | Percentage of balance | Index dollar value ($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.
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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