401(k) investors were quiet in the first quarter of 2023, according to the Alight Solutions 401(k) IndexTM. There were only two above-normal1 trading days in the quarter. Net transfers as a percentage of starting balances were 0.23%. Bond funds saw the highest level of trading inflows, while outflows favored target date funds.2
First quarter observations:
- Net transfers for the quarter were 0.23% of balances.
- 41 out of 62 trading days in the first quarter had net trading dollars moving from equities to fixed income.
Alight Solutions 401(k) Index™ statistics for Q1 2023 and year-to-date: | ||
Index statistics | Q1 2023 | 2023 YTD |
Total transfers as percentage of starting balance | 0.23% | 0.23% |
# Fixed days | 41 (66%) | 41 (66%) |
# Equity days | 21 (34%) | 21 (34%) |
# Above-normal1 days | 2 | 2 |
Asset classes with most trading inflows in Q1 2023 | Percentage of inflows | Index dollar value ($mil) |
Bond funds | 66% | $344 |
Money market funds | 17% | $86 |
Company stock | 6% | $32 |
Asset classes with most trading outflows in Q1 2023 | Percentage of outflows | Index dollar value ($mil) |
Target date funds2 | 60% | $310 |
Stable value funds | 16% | $85 |
International equity funds | 10% | $54 |
First quarter market observations:
Returns for common indices | Q1 2023 | 2023 YTD |
Bloomberg Barclays U.S. Aggregate Index | 2.96% | 2.96% |
S&P 500 Index | 7.50% | 7.50% |
Russell 2000 Index | 2.74% | 2.74% |
MSCI All Country World ex-U.S. Index (net) | 6.87% | 6.87% |
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
