Skip to content

Alight Solutions 401(k) Index™: May 2022 Observations

With volatility in the equity markets, 401(k) investors were active but cautious traders, according to the Alight 401(k) IndexTM. Twelve of the 21 days had above-normal1 trading activity, but no day exceeded 3 times average. All but 3 days in the month saw net trading activity moving money from equities to fixed income.

        
May observations:        

  • On average, 0.018% of 401(k) balances were traded daily.
  • 18 of 21 days favored fixed income funds.

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

Index statistics

May

2022 YTD

Total transfers as percentage of starting balance

0.22%

0.70%

# Fixed days

18 (86%)

75 (73%)

# Equity days

3 (14%)

28 (27%)

# Above-normal days

12

28

Inflows and outflows during the month of May:

  • Trading inflows mainly went to stable value, money market and self-directed window funds.
  • Outflows were primarily from target date2, large U.S. equity and bond funds.

Asset classes with most

trading inflows in May

Percentage of inflows

Index dollar value ($mil)

Stable value funds

85%

$442

Money market funds

12%

$60

Self-directed window funds

3%

$16

Asset classes with most

trading outflows in May

Percentage of outflows

Index dollar value ($mil)

Target date funds2

42%

$216

Large U.S. equity funds

23%

$121

Bond funds

14%

$73

May investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities decreased from 69.1% in April to 68.8% in May.
  • New contributions to equities decreased from 69.5% in April to 69.0% in May.

Asset classes with largest percentage of

total balance at the end of May

Percentage of balance

Index dollar value ($mil)

Target date funds2

30%

$69,680

Large U.S. equity funds

26%

$61,292

Stable value funds

9%

$21,280

Asset classes with most

contributions in May

Percentage of contributions

Index dollar value ($mil)

Target date funds2

48%

$548

Large U.S. equity funds

21%

$241

International equity funds

7%

$82

Returns for common indices

May

2022 YTD

Bloomberg Barclays U.S. Aggregate Index

0.6%

-8.9%

S&P 500 Index

0.2%

-12.8%

Russell 2000 Index

0.2%

-16.6%

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

0.7%

-10.7%

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


2021 Trends & Experience in Defined Contribution Plans

Alight Solutions’ Trends & Experience in Defined Contribution Plans is the premier source for data on the plan provisions in defined contribution (DC) plans.

Alight Solutions 401(k) Index™

Monthly and quarterly Alight Solutions 401(k) Index Reports

Alight Solutions 401(k) Index™: 20 years of insights

Since its inception in 1997, the Alight Solutions 401k Index has provided a front row seat to the trading and investing behavior of millions of workers.