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

With stocks posting their worst month since March 2020, markets experienced a flight to safety among 401(k) plan investors in September, according to the Alight 401(k) IndexTM.  All but two trading days in the month saw net trading activity moving money from equities to fixed income. Stable value funds accounted for 80% of net inflows and money market funds received another 15%. Half of net outflows were from target date funds.2


September observations:

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

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

Index statistics

September

2022 YTD

Total transfers as percentage of starting balance

0.015%

1.04%

# Fixed days

19 (90%)

135 (72%)

# Equity days

2 (10%)

53 (28%)

# Above-normal1 days

3

38


Inflows and outflows during the month of September:

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

Asset classes with most trading

inflows in September

Percentage of inflows

Index dollar value ($mil)

Stable value funds

80%

$275

Money market funds

15%

$50

Bond funds

2%

$8

Asset classes with most trading

outflows in September

Percentage of outflows

Index dollar value($mil)

Target date funds2

50%

$171

Large U.S. equity funds

26%

$88

Mid U.S. equity funds

11%

$37


September investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities decreased from 68.3% in August to 67.2% in September.
  • New contributions to equities decreased from 68.5% in August to 68.0% in September.

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

Percentage of balance

Index dollar value ($mil)

Target date funds2

30%

$64,476

Large U.S. equity funds

26%

$53,213

Stable value funds

10%

$21,648

Asset classes with most

contributions in September

Percentage of contributions

Index dollar value($mil)

Target date funds2

50%

$650

Large U.S. equity funds

20%

$254

International equity funds

7%

$86



September market observations:

Returns for common indices

September

2022 YTD

Bloomberg Barclays U.S. Aggregate Index

-4.32 %

-14.61 %

S&P 500 Index

-9.21 %

-23.87 %

Russell 2000 Index

-9.58 %

-25.10 %

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

-9.99 %

-26.50 %

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.

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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