401(k) investors were more active in Q4 with seven above-normal1 days, half of the 14 total above-normal1 days in 2023. Net trading favored fixed income funds on 38 of 63 days, according to the Alight Solutions 401(k) Index™. Bond (31%) and money market (28%) funds had the most trading inflows, while target date funds2 (40%) and company stock (31%) saw the most outflows.
Fourth quarter observations:
- Net transfers for the quarter were 0.25% of balances.
- 38 out of 63 trading days in the fourth quarter had net trading dollars moving from equities to fixed income.
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Asset classes with most trading inflows in Q4 2023 | Percentage of inflows | Index dollar value ($mil) | |
| 31% | $183 | |
Money market funds | 28% | $161 | |
| Large U.S. equity funds | 25% | $148 |
Asset classes with most trading outflows in Q4 2023 | Percentage of outflows | Index dollar value ($mil) |
Target date funds2 | 40% | $236 |
Company stock | 31% | $178 |
| Mid U.S. equity funds | 16% | $94 |
Returns for common indices | Q4 2023 | 2023 YTD |
Bloomberg Barclays Capital U.S. Aggregate Bond Index | 6.82% | 5.53% |
S&P 500 Index | 11.69% | 26.29% |
Russell 2000 Index | 14.03% | 16.93% |
MSCI All Country World ex-U.S. Index (net) | 9.75% | 15.62% |
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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