Alight Solutions 401(k) Index™: October 2021 Observations

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) Index^TM.  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.

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.

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.

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.