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Alight Solutions 401(k) Index: February 2022 Observations

February was another busy trading month for 401(k) investors, according to the Alight Solutions 401(k) IndexTM.  As international political events drove Wall Street lower, 401(k) investors reacted with above-normal trading activity. Net trading saw investors moving assets into fixed income over equity.

 

February observations:

  • On average, 0.02% of 401(k) balances were traded daily.
  • 14 of 19 days favored fixed income funds.

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

Index statistics

February

2022 YTD

Total transfers as percentage of starting balance

0.24%

0.37%

# Fixed days

14 (74%)

27 (69%)

# Equity days

5 (26%)

12 (31%)

# Above-normal days

6

11

Inflows and outflows during the month of February:

  • Trading inflows mainly went to stable value, money market, and bond funds.
  • Outflows were primarily from target date, large U.S. equity, and small U.S. equity funds.

Asset classes with most

trading inflows in February

Percentage of inflows

Index dollar value ($mil)

Stable value funds

76%

$464

Money market funds

14%

$87

Bond funds

7%

$41

Asset classes with most

trading outflows in February

Percentage of outflows

Index dollar value ($mil)

Target date funds

41%

$251

Large U.S. equity funds

36%

$220

Small U.S. equity funds

6%

$38

February investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities decreased from 70.0% in January to 69.5% in February.
  • New contributions to equities decreased from 70.1% in January to 69.5% in February.

Asset classes with largest percentage of

total balance at the end of February

Percentage of

balance

Index dollar value ($mil)

Target date funds

30%

$73,487

Large U.S. equity funds

27%

$65,665

Stable value funds

8%

$20,747

Asset classes with most 

contributions in February

Percentage of

contributions

Index dollar value ($mil)

Target date funds

45%

$730

Large U.S. equity funds

22%

$355

International equity funds

7%

$122

Returns for common indices

February

2022 YTD

Bloomberg Barclays U.S. Aggregate Index

-1.12%

-3.25%

S&P 500 Index

-2.99%

-8.01%

Russell 2000 Index

1.07%

-8.66%

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

-1.98%

-5.59%


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%.