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.
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The Alight Solutions 401(k) IndexTM statistics for the month of September: |
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|
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% |
$37 |
September investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities decreased from 68.3% in August to 67.2% in September.
- New contributions to equities decreased from 68.5% in August to 68.0% in September.
|
Asset classes with largest percentage |
Percentage of balance |
Index dollar value ($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.
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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