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

May 14, 2018 Shruti Patel

401(k) investors who made trades in April generally traded from equity funds into fixed income funds, according to the Alight Solutions 401(k) Index™. Bond funds, stable value funds, and money market funds accounted for nearly all the net trading inflows for the month.

April had four days of above-normal1 trading activity—up slightly from March’s value (2), but lower than the values for January (12) and February (9).

April observations:

  • April saw a continued movement away from equities, with 12 of 21 days favoring fixed income funds
  • On average, 0.018% of balances were traded daily

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

Index statistics April 2018 YTD
Total transfers as percentage of starting balance 0.16% 0.55%
# Fixed days 12(57%) 41(50%)
# Equity days 9(43%) 41(50%)
# Above-normal days 4 27

 

Inflows and outflows during the month:

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

Asset classes with most trading inflows in April

  Percentage of inflows Index dollar value
($ mil)
Bond funds 41% $130
Stable value funds 37% $118
Money market funds 12% $40

 

Asset classes with most trading outflows in April

  Percentage of outflows Index dollar value
($ mil)
Large U.S. equity funds 49% $158
Target date funds 30% $95
International funds 13% $42

 

April investment portfolios:

  • At the end of April, 68.4% of balances were invested in equities, the same as March
  • 68.2% of new contributions were invested in equities at the end of April, down from 68.7% in March

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

  Percentage of balance Index dollar value
($ mil)
Target date funds 28% $55,615
Large U.S. equity funds 24% $48,024
Stable value funds 10% $20,428

 

Asset classes with most contributions in April

  Percentage of contributions Index dollar value
($ mil)
Target date funds 45% $518
Large U.S. equity funds 20% $232
International funds 8% $95

 

April market observations

Capital market returns were mostly positive last month,  with international equities (represented by the MSCI All Country World ex-U.S. Index) up over 1.5%, and small U.S. equities (represented by the Russell 2000 Index) and large U.S. equities (represented by the S&P 500 Index) up under 1%. U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) fell once again after seeing the slight increase last month. 


Returns for common indices

  April 2018 YTD
Bloomberg Barclays U.S. Aggregate Index -0.7% -2.2%
S&P 500 Index 0.4% -0.4%
Russell 2000 Index 0.9% 0.8%
MSCI All Country World ex-U.S. Index (net) 1.6% 0.4%

 

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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