With only one above-normal1 day, March was a light trading month for 401(k) investors, according to the Alight Solutions 401(k) IndexTM. Just 0.01% of balances were traded daily. Bond funds had the most net inflows (30%) followed by company stock (25%), while target date funds2 had the most net outflows (48%). New contributions to equities increased slightly to 68.4%.
March observations:
- On average, 0.01% of 401(k) balances were traded daily.
- 17 of 23 days favored fixed income funds.
The Alight Solutions 401(k) IndexTM statistics for the month of March: | ||
Index statistics | March | 2023 YTD |
Total transfers as percentage of starting balance | 0.12% | 0.23% |
# Fixed days | 17 (74%) | 41 (66%) |
# Equity days | 6 (26%) | 21 (34%) |
# Above-normal1 days | 1 | 2 |
Inflows and outflows during the month of March:
- Trading inflows mainly went to bond funds, company stock and money market funds.
- Outflows were primarily from target date funds,2 large U.S. equity and international equity funds.
Asset classes with most trading inflows in March | Percentage of inflows | Index dollar value ($mil) |
Bond funds | 30% | $84 |
Company stock | 25% | $68 |
| Money market funds | 22% | $61 |
Asset classes with most trading outflows in March | Percentage of outflows | Index dollar value ($mil) |
Target date funds2 | 48% | $133 |
| Large U.S. equity funds | 28% | $77 |
| International equity funds | 8% | $21 |
March investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities increased from 68.7% in February to 68.8% in March.
- New contributions to equities increased from 68.3% in February to 68.4% in March.
Asset classes with largest percentage of total balance at the end of March | Percentage of balance | Index dollar value ($mil) |
Target date funds2 | 31% | $69,181 |
Large U.S. equity funds | 26% | $59,073 |
Stable value funds | 9% | $19,974 |
Asset classes with most contributions in March | Percentage of contributions | Index dollar value($mil) |
Target date funds2 | 45% | $1046 |
Large U.S. equity funds | 21% | $494 |
International equity funds | 8% | $179 |
March market observations:
Returns for common indices | March | 2023 YTD |
Bloomberg Barclays U.S. Aggregate Index | 2.54% | 2.96% |
S&P 500 Index | 3.67% | 7.50% |
Russell 2000 Index | -4.78% | 2.74% |
MSCI All Country World ex-U.S. Index (net) | 2.44% | 6.87% |
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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