Alight Solutions 401(k) Index™: First Quarter 2018 Observations

April 16, 2018 Shruti Patel

Wall Street’s roller coaster ride during the first quarter of 2018 spurred 401(k) investors to high trading activity, according to the Alight Solutions 401(k) IndexTM. There were 23 days of above-normal1 trading activity in the quarter—the most in a quarter since Q1 2000, which had 25 above-normal days.

First quarter observations:

  • Net transfers for the quarter were 0.43% of balances
  • 32 out of 61 trading days in the first quarter had net trading dollars moving from fixed income to equities

Alight Solutions 401(k) Index™ statistics for Q1 2018 and year to date:

Index Statistics

  Q1 2018 2018 YTD
Total transfers as percentage of starting balance: 0.43% 0.43%
# Fixed days: 29(48%) 29(48%)
# Equity days: 32(52%) 32(52%)
# Above-normal days: 23 23

 

Asset classes with most trading inflows in Q1 2018

  Percentage of inflows Index dollar value
($ mil)
International funds 35% $306
Stable value funds 23% $202
Emerging markets funds 16% $138

 

Asset classes with most trading outflows in Q1 2018

  Percentage of outflows Index dollar value
($ mil)
Target date funds2 34% $303
Company stock 27% $235
Large U.S. equity funds 12% $104

 

First quarter market observations:

As volatility increased during first quarter, all of our followed capital market indices experienced drops in value. U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) and international equities (represented by the MSCI All Country World ex-U.S. Index) fell greater than 1.0%. Large U.S. equities (represented by the S&P 500 Index) dropped just under one percent and small U.S. equities (represented by the Russell 2000 Index) fell by 0.1%.

Returns for common indices

  Q1 2018 2018
Bloomberg Barclays U.S. Aggregate Index -1.5% -1.5%
S&P 500 Index -0.8% -0.8%
Russell 2000 Index -0.1% -0.1%
MSCI All Country World ex-U.S. Index (net) -1.2% -1.2%

 

Members of the media: please contact MacKenzie Lucas for questions about the Alight Solutions 401(k) Index™.

Learn more about the Alight Solutions 401(k) Index here.

  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 two 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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