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

October 12, 2017 Shruti Patel

According to the Alight Solutions 401(k) Index, the third quarter saw a moderate uptick in trading activity among defined contribution plan investors. There were five days of above normal1 trading days in the third quarter—more than twice the amount in the first and second quarters combined.

Third quarter 2017 observations:

  • Net transfers for the quarter amounted to 0.50% of balances—the highest level for a quarter in 2017
  • 43 out of 63 trading days in the third quarter had net trading dollars moving from fixed income to equities

 

The Alight Solutions 401(k) Index™ statistics for Q3 2017 and year to date as of September 30, 2017:

 

Index Statistics

  Q3 2017 2017 YTD
Total transfers as percentage of starting balance: 0.50% 1.04%
# Fixed days: 43(68%) 102(54%)
# Equity days: 20(32%) 86(46%)
# Above normal days: 5 7

 

Asset classes with most trading inflows in Q3 2017

  Percentage of inflows Index dollar value
($ mil)
International funds 30% $284
Stable value funds 20% $193
Money market funds 18% $173

 

Asset classes with most trading outflows in Q3 2017

  Percentage of outflows Index dollar value
($ mil)
Company stock 39% $373
Large U.S. equity funds 29% $275
Small U.S. equity funds 15% $140

 

Third quarter market observations:

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

 

Returns for common indices

  Q3 2017 2017 YTD
Bloomberg Barclays U.S. Aggregate Index 0.9% 3.1%
S&P 500 Index 4.5% 14.2%
Russell 2000 Index 5.7% 10.9%
MSCI All Country World ex-U.S. Index (net) 6.2% 21.1%

 

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.

Download a version of this report

 Download now

 

 

 

Previous Flipbook
Infographic: Changes in the retirement plan landscape
Infographic: Changes in the retirement plan landscape

Our research found three common ways employers are enhancing their DC plans in 2017: simplifying the saving...

Next Flipbook
Executive summary: 2017 Trends & Experience in Defined Contribution Plans
Executive summary: 2017 Trends & Experience in Defined Contribution Plans

Executive summary of the results of the 2017 Trends & Experience in Defined Contribution Plans report.