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The Markets May 11, 2020
401(k) Investors Slowed Trading in April
There were more days when they moved into equities than fixed income.
Reported by Lee Barney
After a turbulent first quarter, 401(k) investors had a slower trading month in April, according to the Alight Solutions 401(k) Index. On average, 0.023% of 401(k) balances were traded daily. Twelve of 21 trading days favored equity funds, and just nine favored fixed income.
Total transfers as a percentage of starting balance were just 0.13%. There were only three above-normal trading days in April, whereas, year-to-date, there have been a total of 32.
Asset classes with the most trading inflows in April were bond funds, taking in 31% of the assets, valued at $80 million, followed by self-directed brokerage windows (19%; $47 million) and money market funds (18%; $47 million).
Asset classes with the most trading outflows in April were target-date funds (TDFs) (44%; $112 million), company stock (24%; $62 million) and large U.S. equity funds (16%; $42 million).
Reflecting market movements and trading activity, the average asset allocation in equities increased from 63.1% in March to 64.7% in April.
Asset classes with the largest percentage of total balance at the end of April were TDFs (29%; $59.7 billion), large U.S. equity funds (25%; $51 billion) and stable value funds (11%; $22.7 billion).
Asset classes with the most contributions in April were TDFs (46%; $562 million), large U.S. equity funds (21%; $250 million) and international equity funds (7%; $83 million).
Small U.S. equities rose 13.7% during the month. Large U.S. equities were up 12.8%. International equities gained 7.6%, and U.S. bonds were up by 1.8%.