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Alight Solutions 401(k) Index™: Q2 2023 Observations

 401(k) investors exhibited see-sawing trading activity in the second quarter of 2023, according to the Alight Solutions 401(k) IndexTM. April and May saw trading activity favoring fixed income, but June saw investors moving money back to equities. This resulted in the lowest net transfer as a percentage of starting balances since Q4 2021. There were just two above-normal1 trading days. Bond funds accounted for the highest level of trading inflows (47%), while outflows favored target date funds(28%).

Second quarter observations:

•    Net transfers for the quarter were 0.19% of balances.
•    37 out of 62 trading days in the second quarter had net trading dollars moving from equities to fixed income.

Alight Solutions 401(k) Index™ statistics for Q2 2023 and year-to-date:

Index statistics

Q2 2023

2023 YTD

Total transfers as percentage of starting balance

0.19%

0.35%

# Fixed days

37 (60%)

78 (63%)

# Equity days

25 (40%)

46 (37%)

# Above-normal1 days

2

4

Asset classes with most

trading inflows in Q2 2023

Percentage of inflows

Index dollar value ($mil)

Bond funds

47%

$195

Large U.S. equity funds

23%

$95

Money market funds

21%

$87

Asset classes with most

trading outflows in Q2 2023

Percentage of outflows

Index dollar value ($mil)

Target date funds2

28%

$119

Stable value funds

26%

$109

Company stock

22%

$93

Returns for common indices

Q2 2023

2023 YTD

Bloomberg Barclays U.S. Aggregate Index

-0.84%

2.09%

S&P 500 Index

8.74%

16.89%

Russell 2000 Index

5.21%

8.09%

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

2.44%

9.47%

[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.

Related Insights


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Alight Solutions 401(k) Index™: First Quarter 2024 Observations

401(k) investors were active in Q1, logging 14 above-normal1 days, according to the Alight Solutions 401(k) Index™. The distribution of those days reveals a slowing trend, however, with eight taking place in January, followed by four in February and just two in March.