Alight Solutions 401(k) Index™: January 2018 Observations

February 15, 2018 Shruti Patel

401(k) investors started 2018 with exceptionally high trading activity, according to the Alight Solutions 401(k) Index™. January had 12 days of above normal trading activity—one fewer than throughout all of 2017. Investors were primarily trading into equities as the stock market climbed to new records during the month.

January observations:

  • Net transfers for the month of January were 0.32% of balances
  • 17 out of 21 days favored equity funds

The Alight Solutions 401(k) Index™ statistics for the month of January 2018:

Index statistics January 2018 YTD
Total transfers as percentage of starting balance 0.32% 0.32%
# Fixed days 4(19%) 4(19%)
# Equity days 17(81%) 17(81%)
# Above normal days 12 12

 

Inflows and outflows during the month:

  • Trading inflows mainly went to international, large U.S. equity, and emerging markets funds
  • Outflows were primarily from stable value, company stock, and bond funds

Asset classes with most trading inflows in January

  Percentage of inflows Index dollar value
($ mil)
International funds 46% $304
Large U.S. equity funds 34% $227
Emerging markets funds 16% $107

 

Asset classes with most trading outflows in January

  Percentage of outflows Index dollar value
($ mil)
Stable value funds 49% $322
Company stock funds 24% $161
Bond funds 11% $74

 

January investment portfolios:

  • At the end of January, 69.5% of balances were invested in equities, up from 68.6% at the end of December
  • 68.1% of new contributions were invested in equities, up from 67.1% at the end of December

Asset classes with largest percentage of total balance at end of January

  Percentage of balance Index dollar value
($ mil)
Target date funds2 27% $57,327
Large U.S. equity funds 24% $51,218
Stable value funds 9% $19,911

 

Asset classes with most contributions in January

  Percentage of contributions Index dollar value
($ mil)
Target date funds 48% $669
Large U.S. equity funds 18% $258
International funds 8% $114

 

January market observations

Large U.S. equities, small U.S. equities, and international equities (represented by the S&P 500 Index, the Russell 2000 Index, and MSCI All Country World ex-U.S. Index, respectively) had positive gains in January. U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) experienced a loss for the month.


Returns for common indices

  January 2018 YTD
Bloomberg Barclays U.S. Aggregate Index -1.2% -1.2%
S&P 500 Index 5.7% 5.7%
Russell 2000 Index 2.6% 2.6%
MSCI All Country World ex-U.S. Index (net) 5.6% 5.6%

 

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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