Alight Solutions 401(k) Index™: January 2019 Observations

February 11, 2019

Less volatility on Wall Street brought a slowdown to trading activity among 401(k) investors, according to the Alight Solutions 401(k) Index. With three trading days of above-normal1 trading activity and one day of low activity, January 2019 was the slowest start to the year in the more than 20-year history of the Index. The average daily activity for the month was 0.016%—lower than the 0.024% in January 2018 and the trailing 5-year average of 0.025%.

January observations:

  • 17 of 21 days favored fixed income funds
  • On average, 0.016% of 401(k) balances were traded daily

The Alight Solutions 401(k) Index™ statistics for the month of January 2019:

Index statistics January 2019 YTD
Total transfers as percentage of starting balance 0.16% 0.16%
# Fixed days 17 (81%) 17 (81%)
# Equity days 4 (19%) 4 (19%)
# Above-normal days 3 3

 

Inflows and outflows during the month:

  • Trading inflows mainly went to bond, small U.S. equity, and stable value funds
  • Outflows were primarily from large U.S. equity, target date2 funds, and company stock
Asset classes with most trading inflows in January Percentage of inflows Index dollar value
($ mil)
Bond funds 79% $233
Small U.S. equity funds 8% $23
Stable value funds 6% $18

 

Asset classes with most trading outflows in January Percentage of outflows Index dollar value
($ mil)
Large U.S. equity funds 43% $127
Target date funds 23% $67
Company stock funds 22% $64

 

January investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased to 67.6% at the end of January from 66.6% at the end of December
  • New contributions in equities increased to 67.7% in January from 66.7% in December
Asset classes with largest percentage of total balance at end of January Percentage of balance Index dollar value
($ mil)
Target date funds 28% $56,546
Large U.S. equity funds 25% $49,313
Stable value funds 11% $21,092

 

Asset classes with most contributions in January Percentage of contribution Index dollar value
($ mil)
Target date funds 47% $697
Large U.S. equity funds 19% $284
International funds 8% $111

January market observations:

January provided relief for investors from the last year’s difficult fourth quarter. The U.S. bond market (represented by the Bloomberg Barclays U.S. Aggregate Index) gained 1.1%. Large U.S. equities (represented by S&P 500 Index) rose 8.0% and small U.S. equities (represented by the Russell 2000 Index) gained 11.3%. International equities (represented by the MSCI ACWI ex-US Index) were up 7.6%.

Returns for common indices January 2019 YTD
Bloomberg Barclays U.S. Aggregate Index 1.1% 1.1%
S&P 500 Index 8.0% 8.0%
Russell 2000 Index 11.3% 11.3%
MSCI All Country World ex-U.S. Index (net) 7.6% 7.6%

 

Members of the media: please contact Dominic Belmonte 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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