Investors Continue Moving from Equities into Fixed Income

The Alight Solutions 401(k) Index for April marks the 15th month in a row that investors have been moving out of equities and into fixed income. On average, a mere 0.014% of 401(k) balances were traded daily.

Nineteen of the 21 trading days in the month (90%) favored fixed income funds. Year-to-date, 401(k) investors have favored fixed income on 73 trading days (89%) and equity on only nine days (11%). April had two above-normal trading days. Year-to-date, there have been 11 such days.

Asset classes with the most trading inflows in April were bond funds (63% and $227 million in inflows), international funds (11%, $39 million) and target-date funds (TDFs) (10%, $38 million). Asset classes with the most trading outflows in April were large U.S. equity funds (47%, $170 million), company stock (35%, $127 million) and small U.S. equity funds (13%, $46 million).

Asset classes with the largest percentage of total balances at the end of April were TDFs (29%, $61.33 billion), large U.S. equity funds (26%, $54.60 billion) and stable value funds (10%, $21.14 billion). Asset classes with the most contributions in April were TDFs (47%, $549 million), large U.S. equity funds (20%, $240 million) and international funds (7%, $82 million).

All the common indices saw positive performance in April, according to Alight Solutions. The U.S. bond market was up just over 0%. Large U.S. equities were up 4.1%, small U.S. equities were up 3.4% and international equities gained 2.6%.