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) Index^TM. 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.

Third quarter market observations:  

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.