According to the Alight Solutions 401(k) IndexTM, 401(k) trading activity was very active in the fourth quarter of 2018—a sharp contrast to what was a record slow third quarter. The fourth quarter had 17 days of above-normal1 trading activity, mostly concentrated around days when the stock market lost ground.
Fourth quarter observations:
- Since the inception of the Index in 1997, there have been only seven quarters with more than the 17 days of above-normal trading activity
- In the fourth quarter, net transfers amounted to 0.55% of starting balances—the highest percentage since the third quarter of 2016
- More than two-thirds (45 out of 63) of trading days in the fourth quarter had net trading movement from equities to fixed income
Alight Solutions 401(k) Index™ statistics for Q4 2018 and year-to-date:
|Index Statistics||Q4 2018||2018 YTD|
|Total transfers as percentage of starting balance||0.55%||1.42%|
|# Fixed days||45(71%)||155(62%)|
|# Equity days||18(29%)||96(38%)|
|# Above-normal days||17||46|
|Asset classes with most trading inflows in Q4 2018||Percentage of inflows||Index dollar value
|Stable value funds||70%||$774|
|Money market funds||21%||$235|
|Asset classes with most trading outflows in Q4 2018||Percentage of outflows||Index dollar value
|Target date funds2||54%||$601|
|Large U.S. equity funds||16%||$175|
|Mid U.S. equity funds||13%||$144|
Investors experienced heightened volatility during the fourth quarter, with capital markets closing mostly negative. Small U.S. equities (represented by the Russell 2000 Index) lost -20.2%, large U.S. equities (represented by the S&P 500 Index) lost -13.5%, and international equities (represented by the MSCI All Country World ex-U.S. Index) lost -11.5%. U.S. bonds, however, (represented by the Bloomberg Barclays U.S. Aggregate Index) were up 1.6%.
|Returns for common indices||Q4 2018||2018 YTD|
|Bloomberg Barclays U.S. Aggregate Index||1.6%||0.0%|
|S&P 500 Index||-13.5%||-4.4%|
|Russell 2000 Index||-20.2%||-11.0%|
|MSCI All Country World ex-U.S. Index (net)||-11.5%||-14.2%|
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.
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