Coming off of a very busy March, the month of April 2025 again saw heightened trading activity among retirement plan investors. According to the newest Alight Solutions 401(k) Index, 0.024% of account balances were traded daily in April, with one-third of the days showing above-normal trading.
That was the highest level since October 2020, and comes on the heels of a March that saw net trades of 0.34% of balances for the month, with half of the days showing above-normal trading (about three times that of an average month) as investors showed concerns over the state of the economy.
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, and 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.
Alight’s monthly 401(k) Index, which closely tracks the trading trends of over 2 million accounts and provides real-time insights into investor behavior, observes that stock values declined in early April, prompting a shift from equities to fixed income. However, as markets rebounded later in the month, investors reversed course and returned to equities. Twelve of 21 days favored fixed income funds.
After reflecting market movements and trading activity, average asset allocation in equities decreased from 71.5% in March to 71.4% in April. New contributions to equities decreased from 70.1% in March to 69.8% in April.
Trading inflows mainly went to stable value (38%), money market funds (25%) and large U.S. equities (17%). Outflows were primarily from target date (68%) and bond funds (18%).
See the April observations from the Alight Solutions 401(k) Index here.
SEE ALSO:
• March Most Active Month for 401(k) Trading Since 2020: Alight
• TDFs Top $4 Trillion Mark in 2024: Morningstar
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.