Skittish 401k Participants Head for ‘Safe’ Money in April

401k, retirement, Alight Solutions, bonds, equities

Investors behaving badly?

The Alight Solutions 401(k) Index found that 401k participants who made trades in April generally moved from equity funds into fixed income funds.

“Bond funds, stable value funds, and money market funds accounted for nearly all the net trading inflows for the month,” Alight said.

April had four days of above-normal trading activity—up slightly from March’s value, but lower than the values for January and February, it added.

April observations:

Inflows and outflows during the month:

April investment portfolios:

April market observations

“Capital market returns were mostly positive last month, with international equities up over 1.5 percent, and small U.S. equities and large U.S. equities up under 1 percent,” Alight observed. “U.S. bonds fell once again after seeing the slight increase last month.”

Alight defines a “normal” level of relative transfer activity is when the net daily movement of participants’ balances as a percent of total 401k 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.

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