401(k) Investors Moved into Fixed Income in April

In light of the market volatility, they fled from equities

Among the 401(k) investors who made trades in April, the majority moved from equities into fixed income, according to the Alight Solutions 401(k) Index.

Bond, stable value and money market funds accounted for nearly all of the new trading inflows during the month. The outflows came primarily from U.S. equity, target-date and international funds.

Bond funds took in 41% of the inflows, stable value funds received 37%, and money market funds, 12%. Investors took $158 million out of large U.S. equity funds, which accounted for 49% of the outflows. That was followed by $95 million in redemptions from target-date funds (30%) and $42 million from international funds (13%).

There were four days of above-normal trading activity, up slightly from March but lower than January and February. At the end of April, 68.4% of balances were invested in equities. In terms of new contributions during the month, 68.2% went to equities, down slightly from 68.7% in March.

By the end of April, target-date funds held $55.62 billion in assets, comprising 28% of 401(k) balances. That was followed by large U.S. equity funds, which held $48.02 billion, accounting for 24% of 401(k) balances, and stable value funds, which had $20.43 billion in assets, comprising 10% of 401(k) balances.

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