Participant Trading Ticked Up in April
Participant transfer activity picked up in April, but was still well short of surges earlier in the year.
April had four days of above-normal trading activity — up slightly from March’s value (2), but lower than the values for January (12) and February (9), according to the Alight Solutions 401(k) Index.
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.
Those 401(k) investors who made trades in April generally traded from equity funds into fixed income funds, with bond funds (41%), stable value funds (37%) and money market funds (12%) accounting for nearly all the net trading inflows for the month.
Large U.S. equity funds relinquished nearly half (49%) of the outflows during the month, with target-date funds (30%) and international funds (13%) accounting for most of the rest.
On the other hand, target-date funds drew 45% of the month’s contributions ($518 million) tracked by the index, and large U.S. equity funds, with 20% of the total, came in second ($232 million). International funds were the third-highest recipient of contributions, garnering 8%.
On average, 0.018% of balances were traded daily.