An up-and-down month on Wall Street saw 401(k) investors mostly stay the course in January, according to the Alight Solutions 401(k) IndexTM. The only day of above-normal activity1 was on January 6, when investors rushed out of large U.S. equity funds amid events at the U.S. Capitol. One-out-of-every-six net trading outflows for the month from large U.S. equity funds occurred on January 6.
January observations:
- Average net trading activity was 0.024% of 401(k) balances, up from 0.015% in December
- Nine days favored equity funds and 10 days favored fixed income funds
Alight Solutions 401(k) Index statistics for January 2021:
| Index statistics | January | 2021 YTD |
| Total transfers as percentage of starting balance | 0.21% | 0.21% |
| # Fixed days | 10 (53%) | 10 (53%) |
| # Equity days | 9 (47%) | 9 (47%) |
| # Above-normal days | 1 | 1 |
Inflows and outflows during the month of January:
- Trading inflows mainly went to stable value, target date2 and emerging markets funds
- Outflows were primarily from large U.S. equity funds and company stock
Asset classes with most trading inflows in January
| Percentage of inflows | Index dollar value ($ mil) | |
| Stable value | 37% | $184 |
| Target date funds | 15% | $72 |
| Emerging markets | 14% | $69 |
Asset classes with most trading outflows in January
| Percentage of outflows | Index dollar value ($ mil) | |
| Large U.S. equities | 71% | $354 |
| Company stock | 27% | $132 |
January investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities decreased slightly from 67.7% in December to 67.6% in January
- New contributions to equities increased from 67.3% in December to 68.3% in January
Asset classes with largest percentage of total balance at end of January
| Percentage of balance | Index dollar value ($ mil) | |
| Target date funds | 30% | $72,490 |
| Large U.S. equity funds | 25% | $60,216 |
| Stable value funds | 9% | $21,685 |
Asset classes with most contributions in January
| Percentage of contributions | Index dollar value ($ mil) | |
| Target date funds | 47% | $715 |
| Large U.S. equity funds | 21% | $315 |
| International equity funds | 7% | $112 |
Returns for common indices
| January | 2021 YTD | |
| Bloomberg Barclays U.S. Aggregate Index | -0.7% | -0.7% |
| S&P 500 Index | -1.0% | -1.0% |
| Russell 2000 Index | 5.0% | 5.0% |
| MSCI All Country World ex-U.S. Index (net) | 0.2% | 0.2% |
Members of the media: please contact Landis Cullen for questions about the Alight Solutions 401(k) Index™.
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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.
