401(k) Participant Trades Favor Fixed Income in April

For more than one year, 401(k) investors have been moving to safer investments, according to the Alight Solutions 401(k) Index.

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%.