Volatility on Wall Street made for high trading activity in retirement plans in the first quarter of 2025, according to the Alight Solutions 401(k) IndexTM. Until mid-February, when the S&P 500 reached all-time highs, 401(k) investors favored equities. However, as stock prices began to decline, many shifted their investments to fixed income funds. There was above-normal1 trading activity on 29 of the 60 trading days.
First quarter observations:
- 0.77% of balances were traded, the highest level since Q3 2020.
- 41 of 60 days favored fixed income funds.
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Asset classes with most trading inflows in Q1 2025 | Percentage of inflows | Index dollar value ($mil) |
| Bond funds | 33% | $686 |
| Stable Value | 25% | $509 |
| Money market funds | 18% | $366 |
Asset classes with most trading outflows in Q1 2025 | Percentage of outflows | Index dollar value ($mil) |
Target date funds2 | 73% | $1,496 |
Large U.S. equity funds | 21% | $430 |
| Small U.S. equity funds | 3% | $55 |
Asset classes with largest percentage of total balance at the end of Q1 | Percentage of balance | Index dollar value ($mil) |
Target date funds2 | 31% | $82,491 |
Large U.S. equity funds | 29% | $75,444 |
| Bond funds | 7% | $18,054 |
Asset classes with most contributions in Q1 | Percentage of contributions | Index dollar value ($mil) |
Target date funds2 | 45% | $2,683 |
Large U.S. equity funds | 25% | $1,447 |
| International equity funds | 7% | $388 |
Returns for common indices | Q1 | 2025 YTD |
Bloomberg Barclays U.S. Aggregate Bond Index | 2.78% | 2.78% |
S&P 500 Index | -4.27% | -4.27% |
Russell 2000 Index | -9.48% | -9.48% |
MSCI All Country World ex-U.S. Index (net) | 5.23% | 5.23% |
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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