Alight Solutions 401(k) Index™: Fourth Quarter 2017 Observations

January 15, 2018 Shruti Patel

According to the Alight Solutions 401(k) IndexTM, the fourth quarter of 2017 saw moderate trading activity among defined contribution plan investors. There were six days of above normal1 trading activity in the quarter—nearly as many as the previous three quarters combined (seven).

Fourth quarter observations:

  • Net transfers for the quarter amounted to 0.51% of balances—the highest level for a quarter in 2017
  • 33 out of 63 trading days in the fourth quarter had net trading dollars moving from fixed income to equities

Alight Solutions 401(k) Index™ statistics for Q4 2017 and year end:

Index Statistics

  Q4 2017 2017
Total transfers as percentage of starting balance: 0.51% 1.45%
# Fixed days: 30(48%) 132(53%)
# Equity days: 33(52%) 119(47%)
# Above normal1 days: 6 13

 

Asset classes with most trading inflows in Q4 2017

  Percentage of inflows Index dollar value
($ mil)
International funds 50% $456
Large U.S. funds 21% $192
Bond funds 17% $152

 

Asset classes with most trading outflows in Q4 2017

  Percentage of outflows Index dollar value
($ mil)
Company stock 43% $390
Stable value funds 33% $304
Target date funds2 16% $145

 

Fourth quarter market observations:

Markets in the fourth quarter showed positive results. Large U.S. equities (represented by the S&P 500 Index), international equities (represented by the MSCI All Country World ex-U.S. Index), and small U.S. equities (represented by the Russell 2000 Index) continued to post positive results in the fourth quarter. U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) had modest returns.

Returns for common indices

  Q4 2017 2017
Bloomberg Barclays U.S. Aggregate Index 0.4% 3.5%
S&P 500 Index 6.6% 21.8%
Russell 2000 Index 3.3% 14.7%
MSCI All Country World ex-U.S. Index (net) 5.0% 27.2%

 

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 for companies who do not have target date funds. The amount in the target risk funds is less than 10% of the total.

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