Alight Solutions 401(k) Index™: January 2021 observations

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) Index^TM. 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:

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

Asset classes with most trading outflows in January

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

Asset classes with most contributions in January

Returns for common indices

Members of the media: please contact Landis Cullen for questions about the Alight Solutions 401(k) Index™. 

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 two 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.