401(k) investors sought stability in Q3, with net trading favoring fixed income funds on 39 of 63 days, according to the Alight Solutions 401(k) Index™. Money market funds (33%) and bond funds (31%) had the most trading inflows with large U.S. equity funds following at a distant third (19%). There were only three above-normal1 days for the quarter.
Third quarter observations:
• Net transfers for the quarter were 0.22% of balances.
• 39 out of 63 trading days in the third quarter had net trading dollars moving from equities to fixed income.
Alight Solutions 401(k) Index™ statistics for Q3 2023 and year-to-date: | ||
Index statistics | Q3 2023 | 2023 YTD |
Total transfers as percentage of starting balance | 0.22% | 0.58% |
# Fixed days | 39 (62%) | 117 (63%) |
# Equity days | 24 (38%) | 70 (37%) |
# Above-normal1 days | 3 | 7 |
Asset classes with most trading inflows in Q3 2023 | Percentage of inflows | Index dollar value ($mil) | |
| 33% | $169 | |
Bond funds | 31% | $162 | |
Large U.S. equity funds | 19% | $99 |
Asset classes with most trading outflows in Q3 2023 | Percentage of outflows | Index dollar value ($mil) |
Company stock | 37% | $190 |
Stable value funds | 31% | $161 |
Mid U.S. equity funds | 11% | $59 |
Returns for common indices | Q3 2023 | 2023 YTD |
Bloomberg Barclays U.S. Aggregate Index | -3.23% | -1.21% |
S&P 500 Index | -3.27% | 13.07% |
Russell 2000 Index | -5.13% | 2.54% |
MSCI All Country World ex-U.S. Index (net) | -3.77% | 5.34% |
[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.
