February was a light trading month for 401(k) investors, according to the Alight Solutions 401(k) IndexTM. There were no days of above-normal1 activity. Monthly net transfers as a percentage of balances was 0.15%, down from 0.21% in January.
February observations:
- Average net trading activity was 0.016% of 401(k) balances, down from 0.024% in January.
- Four days favored fixed income funds and 15 days favored equity funds.
Alight Solutions 401(k) Index statistics for February 2021:
| Index statistics | February | 2021 YTD |
| Total transfers as percentage of starting balance | 0.15% | 0.31% |
| # Fixed days | 4 (21%) | 14 (37%) |
| # Equity days | 15 (79%) | 24 (63%) |
| # Above-normal days | 0 | 1 |
Inflows and outflows during the month of February:
- Trading inflows mainly went to small U.S. equities, mid U.S. equities and emerging markets.
- Outflows were primarily company stock, stable value and bond funds.
Asset classes with most trading inflows in February
| Percentage of inflows | Index dollar value ($ mil) | |
| Small U.S. equities | 33% | $125 |
| Mid U.S. equities | 26% | $99 |
| Emerging markets | 15% | $58 |
Asset classes with most trading outflows in February
| Percentage of outflows | Index dollar value ($ mil) | |
| Company stock | 27% | $100 |
| Stable value | 24% | $91 |
| Bond | 21% | $78 |
February investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities increased from 67.6% in January to 68.3% in February.
- New contributions to equities increased from 68.3% in January to 68.6% in February.
Asset classes with largest percentage of total balance at end of February
| Percentage of balance | Index dollar value ($ mil) | |
| Target date funds2 | 30% | $73,985 |
| Large U.S. equity funds | 25% | $61,952 |
| Stable value funds | 9% | $21,501 |
Asset classes with most contributions in February
| Percentage of contributions | Index dollar value ($ mil) | |
| Target date funds | 44% | $731 |
| Large U.S. equity funds | 21% | $350 |
| International equity funds | 8% | $127 |
Returns for common indices
| February | 2021 YTD | |
| Bloomberg Barclays U.S. Aggregate Index | -1.4% | -2.2% |
| S&P 500 Index | 2.8% | 1.7% |
| Russell 2000 Index | 6.2% | 11.6% |
| MSCI All Country World ex-U.S. Index (net) | 2.0% | 2.2% |
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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 two times the average daily net activity of the preceding 12 months.
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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.
Members of the media: please contact Landis Cullen for questions about the Alight Solutions 401(k) Index™.
