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

October was another light trading month for 401(k) plan investors, according to the Alight 401(k) IndexTM.  With just two above-normal1 days, stable value funds accounted for over 80% of net inflows, while outflows were primarily from target date funds2 (37%), company stock (35%) and large U.S. equity funds (12%).

 


 

October observations:

  • On average, 0.012% of 401(k) balances were traded daily.
  • 18 of 21 days favored fixed income funds.

The Alight Solutions 401(k) IndexTM statistics for the month of October:

Index statistics

October

2022 YTD

Total transfers as percentage of starting balance

0.015%

1.16%

# Fixed days

18 (86%)

153 (73%)

# Equity days

3 (14%)

56 (27%)

# Above-normal1 days

2

40


Inflows and outflows during the month of October:

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

Asset classes with most trading

inflows in October

Percentage of inflows

Index dollar value ($mil)

Stable value funds

81%

$263

Money market funds

16%

$50

Asset classes with most trading

outflows in October

Percentage of outflows

Index dollar value($mil)

Target date funds2

37%

$121

Company stock

34%

$109

Latge U.S. equity funds

12%

$40


October investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased from 67.2% in September to 68.1% in October.
  • New contributions to equities increased from 68.0% in September to 68.1% in October.

Asset classes with largest percentage
of total balance at the end of October

Percentage of balance

Index dollar value ($mil)

Target date funds2

29%

$63,667

Large U.S. equity funds

26%

$56,790

Stable value funds

10%

$21,523

Asset classes with most

contributions in October

Percentage of contributions

Index dollar value($mil)

Target date funds2

50%

$511

Large U.S. equity funds

20%

$202

International equity funds

7%

$69


Returns for common indices

October

2022 YTD

Bloomberg Barclays U.S. Aggregate Index

-1.30 %

-15.72 %

S&P 500 Index

8.10 %

-17.70 %

Russell 2000 Index

11.01 %

-16.86 %

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

2.99 %

-24.31 %

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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Alight Solutions 401(k) Index™

Monthly and quarterly Alight Solutions 401(k) Index Reports

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

November was another light trading month for 401(k) plan investors, according to the Alight 401(k) Index™.

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

401(k) plan investors were light traders in July, according to the Alight 401(k) Index™. There were no above-normal trading days as Wall Street posted its best month since November 2020.