Trading among retirement accounts increased slightly in April, finds data released by Alight Solutions’ 401(k) Index.
According to the findings, investors had four “above-normal” trading days compared to two in March, for a total number of 18 days for 2024.
For reference, Alight explains 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 2 times the average daily net activity of the preceding 12 months.
On average, 0.009% of 401(k) balances were traded daily in April, a small increase from 0.008% in March. Bonds came in first place with the most inflows (52%), followed by money market funds (18%) and large U.S. equity funds (18%).
Target-date funds (TDFs) observed the most outflows out of any other asset class (52%), trailed by mid U.S. equity funds (19%) and small U.S. equity funds (11%). Thirteen out of 22 days in April favored fixed income funds.
On the contribution side, TDFs saw the most funds added, at 50% of contributions for a dollar value of $705 million. Large U.S. equities experienced 22% of contributions, while international equity funds realized 7%.
New contributions to equities increased slightly from 69.7% in March to 69.8% in April, while average asset allocation in equities dropped from 71.7% in March to 71.3% in April.
Alight’s 401(k) Index analyzes trading activity for two million participants with over $200 billion in collective assets. The reports detail monthly and quarterly trading volume, asset flows, and market activity.
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