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Alight Solutions 401(k) Index: March 2022 Observations

March was another busy trading month for 401(k) investors, according to the Alight Solutions 401(k) IndexTM.  There were 5 above-normal trading days in March, often occurring when the market fell. Despite the market rally for the month, investors continued to move money from equities to fixed income.

March observations:

  • On average, 0.014% of 401(k) balances were traded daily.
  • 15 of 23 days favored fixed income funds.

The Alight Solutions 401(k) Index statistics for the month of March:

Index statistics

March

2022 YTD

Total transfers as percentage of starting balance

0.09%

0.46%

# Fixed days

15 (65%)

42 (68%)

# Equity days

8 (35%)

20 (32%)

# Above-normal days

5

16

Inflows and outflows during the month of March:

  • Trading inflows overwhelmingly went to stable value funds.
  • Outflows were primarily from target date, company stock, and mid U.S. equity funds.

Asset classes with most

trading inflows in March

Percentage of inflows

Index dollar value ($mil)

Stable value funds

80%

$181

Specialty/Sector funds

9%

$20

Money market funds

6%

$13

Asset classes with most

trading outflows in March

Percentage of outflows

Index dollar value ($mil)

Target date funds

48%

$108

Company stock

28%

$63

Mid U.S. equity funds

9%

$20

March investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased from 69.5% in February to 69.9% in March.
  • New contributions to equities increased from 69.5% in February to 69.7% in March.
     

Asset classes with largest percentage of

total balance at the end of March

Percentage of balance

Index dollar value ($mil)

Target date funds

30%

$72,101

Large U.S. equity funds

27%

$65,402

Stable value funds

9%

$20,637

Asset classes with most

contributions in March

Percentage of contributions

Index dollar value ($mil)

Target date funds

42%

$914

Large U.S. equity funds

22%

$482

International equity funds

8%

$176

Returns for common indices

March

2022 YTD

Bloomberg Barclays U.S. Aggregate Index

-2.78%

-5.93%

S&P 500 Index

3.71%

-4.60%

Russell 2000 Index

1.24%

-7.53%

MSCI All Country World ex-U.S. Index (net)

0.16%

-5.44%

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.

Related Insights


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