The third quarter of 2018 had no days of above-normal1 trading activity, according to the Alight Solutions 401(k) IndexTM. Since the inception of the 401(k) Index in 1997, this is only the second time that a quarter experienced no days of above-normal trading activity.
The only other time this happened was the first quarter of 2017. Alight’s data indicates that as stock values have increased, 401(k) investors have not been spurred to make trades, but are staying the course with their investment strategy.
Third quarter observations:
- With zero days of above-normal activity, the transfers for the quarter, 0.42%, were the lowest since second quarter 2017
- More than two-thirds (43 out of 63) of trading days in the third quarter had net trading movement from equities to fixed income
Alight Solutions 401(k) Index™ statistics for Q3 2018 and year-to-date:
Index Statistics
| Q3 2018 | 2018 YTD | |
|---|---|---|
| Total transfers as percentage of starting balance | 0.42% | 1.02% |
| # Fixed days | 43(68%) | 110(59%) |
| # Equity days | 20(32%) | 78(42%) |
| # Above-normal days | 0 | 29 |
Asset classes with most trading inflows in Q3 2018
| Percentage of inflows | Index dollar value ($ mil) |
|
|---|---|---|
| Stable value funds | 47% | $393 |
| Mid U.S. equity funds | 20% | $171 |
| Money market funds | 13% | $107 |
Asset classes with most trading outflows in Q3 2018
| Percentage of outflows | Index dollar value ($ mil) |
|
|---|---|---|
| Target date funds2 | 37% | $310 |
| Company stock funds | 35% | $296 |
| Emerging markets funds | 13% | $108 |
Market observations:
The third quarter was mostly positive for investors. Large U.S. equities (represented by the S&P 500 Index) up 7.7%, and small U.S. equities (represented by the Russell 2000 Index) up 3.6%. International equities (represented by the MSCI All Country World ex-U.S. Index) saw less of an increase at 0.7% and U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) broke even for the month with a slight net gain of less than 0.1%.
Returns for common indices
| Q1 2018 | 2018 YTD | |
|---|---|---|
| Bloomberg Barclays U.S. Aggregate Index | 0.0% | -1.6% |
| S&P 500 Index | 7.7% | 10.6% |
| Russell 2000 Index | 3.6% | 11.5% |
| MSCI All Country World ex-U.S. Index (net) | 0.7% | -3.1% |
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.
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