As the S&P 500 posted its best monthly performance since last November, 401(k) investors were content to be light traders in October, according to the Alight Solutions 401(k) IndexTM. When trading occurred, investors tended to be in profit-taking mode and moved money from equities to fixed income. There was one above-normal trading day—the first since May.
October observations:
- On average, 0.009% of 401(k) balances were traded daily.
- 5 of 21 days favored fixed-income funds.
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The Alight Solutions 401(k) Index statistics for the month of October: |
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Index statistics |
October |
2021 YTD |
|
Total transfers as percentage of starting balance |
0.08% |
0.56% |
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# Fixed days |
15 (71%) |
113 (54%) |
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# Equity days |
6 (29%) |
96 (46%) |
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# Above-normal days1 |
1 |
3 |
Inflows and outflows during the month of October:
- Trading inflows mainly went to stable value, bond and money market funds.
- Outflows were primarily from company stock, large U.S. equity and small U.S. equity funds.
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Asset classes with most trading inflows in October |
Percentage of inflows |
Index dollar value ($mil) |
|
Stable value funds |
54% |
$118 |
|
Bond funds |
15% |
$32 |
|
Money market funds |
13% |
$28 |
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Asset classes with most trading outflows in October |
Percentage of outflows |
Index dollar value ($mil) |
|
Company stock |
51% |
$112 |
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Large U.S. equity funds |
27% |
$60 |
|
Small U.S. equity funds |
8% |
$18 |
October investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities increased from 69.8% in September to 70.5% in October.
- New contributions to equities decreased from 69.4% in September to 69.2% in October.
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Asset classes with largest percentage of total balance at the end of October |
Percentage of balance |
Index dollar value ($mil) |
|
Target date funds |
30% |
$82,018 |
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Large U.S. equity funds |
27% |
$72,373 |
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Stable value funds |
7% |
$20,295 |
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Asset classes with most contributions in October |
Percentage of contribution |
Index dollar value ($mil) |
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Target date funds |
49% |
$564 |
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Large U.S. equity funds |
20% |
$235 |
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International equity funds |
7% |
$82 |
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Returns for common indices |
October |
2021 YTD |
|
Bloomberg Barclays U.S. Aggregate Index |
-0.03% |
-1.58% |
|
S&P 500 Index |
7.01% |
24.04% |
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Russell 2000 Index |
4.25% |
17.19% |
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MSCI All Country World ex-U.S. Index (net) |
2.39% |
8.43% |
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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.
