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

April 16, 2018 Shruti Patel

Despite a volatile stock market, 401(k) trading activity was light in March according to the Alight Solutions 401(k) Index™. March saw a consistent movement away from equities, with 16 of the 21 days favoring fixed income funds but only two days of above-normal1 trading activity.

March observations:

  • March saw two moderately high days of trading activity along the first low trading day of 2018
  • On average, 0.014% of balances were traded daily

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

Index statistics March 2018 YTD
Total transfers as percentage of starting balance 0.17% 0.43%
# Fixed days 16(76%) 29(48%)
# Equity days 5(24%) 32(53%)
# Above-normal days 2 23

 

Inflows and outflows during the month:

  • Trading inflows mainly went to stable value, bond, and money market funds
  • Outflows were primarily from target date2, large U.S. equity, and international funds

Asset classes with most trading inflows in March

  Percentage of inflows Index dollar value
($ mil)
Stable value funds 50% $169
Bond funds 32% $107
Money market funds 16% $53

 

Asset classes with most trading outflows in March

  Percentage of outflows Index dollar value
($ mil)
Target date funds 37% $125
Large U.S. equity funds 33% $111
International funds 10% $35

 

March investment portfolios:

  • At the end of March, 68.4% of balances were invested in equities, down from 68.9% at the end of February
  • 68.7% of new contributions were invested in equities at the end of March, up from 68.1% in February

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

  Percentage of balance Index dollar value
($ mil)
Target date funds 28% $55,482
Large U.S. equity funds 24% $47,991
Stable value funds 10% $20,393

 

Asset classes with most contributions in March

  Percentage of contributions Index dollar value
($ mil)
Target date funds 42% $828
Large U.S. equity funds 20% $397
International funds 9% $180

 

March market observations

Capital market returns were mixed during the month, with small U.S. equities (represented by the Russell 2000 Index) and U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) gaining in value,  and large U.S. and international equities (represented by the S&P 500 Index and MSCI All Country World ex-U.S. Index, respectively) declining in value.


Returns for common indices

  March 2018 YTD
Bloomberg Barclays U.S. Aggregate Index 0.6% -1.5%
S&P 500 Index -2.5% -0.8%
Russell 2000 Index 1.3% -0.1%
MSCI All Country World ex-U.S. Index (net) -1.8% -1.2%

 

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.

  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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