Alight Solutions 401(k) Index™: Fourth Quarter 2022 Observations

401(k) plan investors were light traders in the final quarter of 2022, according to the Alight Solutions 401(k) Index^TM. There were three above-normal¹ trading days in the quarter, down from five above-normal¹ days seen in Q3. Most days (77%) favored fixed income with stable value funds receiving the highest percentage of inflows (52%). Target date funds² (42%) and company stock (34%) had the most outflows for the quarter.

Fourth quarter observations:  

• Net transfers for the quarter were 0.31% of balances.
• 48 out of 62 trading days in the fourth quarter had net trading dollars moving from equities to fixed income.

Fourth quarter market observations:  

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