Alight Solutions 401(k) Index™: February 2019 Observations

March 6, 2019

February was a slow trading month for 401(k) investors, according to the Alight Solutions 401(k) Index. There were three trading days of above-normal1 trading activity. When participants made trades, they overwhelmingly favored fixed income funds over equities.

February observations:

  • 17 of 19 days favored fixed income funds
  • On average, 0.016% of 401(k) balances were traded daily

The Alight Solutions 401(k) Index™ statistics for the month of February 2019:

Index statistics February 2019 YTD
Total transfers as percentage of starting balance 0.19% 0.34%
# Fixed days 17 (89%) 34 (85%)
# Equity days 2 (11%) 6 (15%)
# Above-normal days 3 6

 

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 funds, company stock, and international funds
Asset classes with most trading inflows in February Percentage of inflows Index dollar value
($ mil)
Bond funds 45% $168
Stable value funds 30% $112
Money market funds 7% $26

 

Asset classes with most trading outflows in February Percentage of outflows Index dollar value
($ mil)
Large U.S. equity funds 58% $217
Company stock 36% $134
International funds 5% $18

 

February investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased to 67.9% at the end of February from 67.6% at the end of January
  • New contributions in equities remained unchanged at 67.7% in February
Asset classes with largest percentage of total balance at end of February Percentage of balance Index dollar value
($ mil)
Target date2 funds 28% $57,954
Large U.S. equity funds 25% $50,673
Stable value funds 10% $21,144

 

Asset classes with most contributions in February Percentage of contribution Index dollar value
($ mil)
Target date funds 44% $737
Large U.S. equity funds 19% $314
Company stock 7% $116

February market observations:

For most investors, February continued the positive performance experienced in January of this year. Large U.S. equities (represented by S&P 500 Index) gained 3.2% and small U.S. equities (represented by the Russell 2000 Index) increased 5.2%. International equities (represented by the MSCI ACWI ex-US Index) rose 2.0%. The U.S. bond market (represented by the Bloomberg Barclays U.S. Aggregate Index) lost -0.1%.

Returns for common indices February 2019 YTD
Bloomberg Barclays U.S. Aggregate Index -0.1% 1.0%
S&P 500 Index 3.2% 11.5%
Russell 2000 Index 5.2% 17.0%
MSCI All Country World ex-U.S. Index (net) 2.0% 9.7%

 

Members of the media: please contact Dominic Belmonte 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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