Alight Solutions 401(k) Index™: October 2026 observations

Retirement plan trading remained modest in October, with 0.06% of assets transferred and trading direction evenly split, as 11 of 22 trading days favored fixed income. Broad market returns were mixed: the S&P 500 declined 0.87% and the MSCI ACWI ex-U.S. fell 2.81%, while the Russell 2000 gained 0.58% and the Bloomberg U.S. Aggregate rose 2.44%. Against that backdrop, participants used strength in individual holdings as an opportunity to lock in gains.

The most notable shift was the concentration of trading out of company stock. Strong earnings-driven gains in a small number of company stock funds prompted participants to realize profits, with company stock accounting for 33% of all trading outflows in October. That activity was concentrated at month-end, producing the only above-normal¹ trading days of the month on October 29 (1.95 times average) and October 30 (2.10 times). Beyond company stock, outflows came mainly from premixed and self-directed window funds, while inflows favored stable value, money market and large U.S. equity funds. Notably, large U.S. equity funds received net inflows on both of those late-month days, suggesting participants were rebalancing rather than retreating from the market.

Despite this profit-taking, overall portfolios remained heavily invested in equities, with allocations holding steady at 74% of balances, while target date funds² and large U.S. equity funds continued to receive about three-quarters of contributions. The contrast suggests that while some participants used strong gains in select holdings to rebalance and capture profits, long-term saving and investment behavior remained largely unchanged.

October investment portfolios:

• The portfolio mix changed little. Target date funds² and large U.S. equity funds represented 31% and 30% of balances, respectively (61% combined), while equities made up 74% of balances, unchanged from September. 
• Contributions followed the same pattern. Target date funds² received 50% of contributions ($614 million) and large U.S. equity funds received 23% ($278 million), together about three-quarters of the total. 
• International equity funds received 7% of contributions ($87 million), even as the MSCI ACWI ex-U.S. Index declined 2.81%. 
• Markets were mixed. The Bloomberg U.S. Aggregate gained 2.44% as the 10-year Treasury yield fell about 0.35 percentage points, while the S&P 500 and MSCI ACWI ex-U.S. declined and the Russell 2000 rose modestly.

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 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.