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Alight Solutions 401(k) Index™: Third Quarter 2022 Observations

See-sawing stock prices in the third quarter of 2022 had 401(k) plan investors trading in starts and stops, according to the Alight Solutions 401(k) IndexTM. As Wall Street was posting gains at the beginning of the quarter, trading was light and saw trades moving money to equities. However, as stocks slid in the second half, trading activity increased and money flowed to fixed income. There were 5 above-normal1 trading days in the quarter, down from 17 above-normal days seen in Q2.

Third quarter observations:        

  • Net transfers for the quarter were 0.24% of balances.
  • 42 out of 64 trading days had net trading dollars moving from equities to fixed income.

Alight Solutions 401(k) Index™ statistics for Q3 2022 and year-to-date:

Index statistics

Q3 2022

2022 YTD

Total transfers as percentage of starting balance

0.24%

1.04%

# Fixed days

42 (66%)

135 (72%)

# Equity days

22 (34%)

53 (28%)

# Above-normal1 days

5

38

Asset classes with most

trading inflows in Q3 2022

Percentage of inflows

Index dollar value ($mil)

Stable value funds

68%

$350

Money market funds

17%

$87

Bond funds

8%

$43

Asset classes with most

trading outflows in Q3 2022

Percentage of outflows

Index dollar value ($mil)

Target date funds2

65%

$334

Small U.S. equity funds

10%

$52

Mid U.S. equity funds

10%

$51

Third quarter market observations:  

Returns for common indices

Q3 2022

2022 YTD

Bloomberg Barclays U.S. Aggregate Index

-4.75%

-14.61%

S&P 500 Index

-4.88%

-23.87%

Russell 2000 Index

-2.19%

-25.10%

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

-9.91%

-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.

Related Insights


Alight Solutions 401(k) Index™

Monthly and quarterly Alight Solutions 401(k) Index Reports

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

November was another light trading month for 401(k) plan investors, according to the Alight 401(k) Index™.

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

401(k) plan investors were light traders in July, according to the Alight 401(k) Index™. There were no above-normal trading days as Wall Street posted its best month since November 2020.