Retirement Investors Maintain Trading Consistency in Q1

Retirement investors’ trading within their 401(k) accounts picked up briefly in March, but most investors stayed the course during the first quarter of the year and remained largely committed to long-term strategies, Alight Solutions reported in a recent update to its 401(k) index.

“Coming into the year, we were actually seeing a reversal of a 2025 trend,” wrote Chris Farmer, Alight’s wealth portfolio leader, in an emailed response to questions. “Last year, many participants had moved toward fixed income, but in January and February, they began gradually reallocating back into equities, with a notable tilt toward international and emerging markets.”

That trend changed relatively quickly in March, according to a different recent trading index update from Alight.

There were three above-normal trading days in Q1 2026, all in March. About 60% of inflows to fixed income that month happened in just the first six trading days of the month—the week after the U.S. and Israel’s February 28 attack on Iran—and 16 of 22 trading days in March recorded net trading dollars moving from equities to fixed income.

“That timing lines up closely with rising geopolitical tensions and a spike in oil prices, which brought inflation concerns back into focus and pushed out expectations for near-term [Federal Reserve] rate cuts,” Farmer wrote. “In response, we saw some participants rebalance, moving out of equities and into more conservative options.”

In March, stable value (47%), money market (29%) and bond (16%) funds comprised most asset class inflows. Investors scaled back exposure to sectors including large U.S. equity (42% of outflows), international (25%) and premixed (20%).

After reflecting market movements and trading activity, the average asset allocation to equities was 72.8% in March, 0.07 percentage points lower than the January and February averages. New contributions to equities decreased to 71% from 72% in February.

“The bigger story is consistency,” Farmer wrote. “Most participants didn’t react at all. … That level of discipline continues to be a defining characteristic of participant behavior, even during periods of heightened uncertainty.”

Investors who traded in Q1 favored fixed income: Out of 61 trading days that quarter, 37 (60%) recorded net trading dollars moving to fixed income from equities, and 24 (40%) recorded dollars moving in the opposite, riskier direction. Net transfers for the quarter equaled 0.50% of balances.

Emerging markets and stable value funds were the asset classes with the most inflows in Q1 (21% each), with bond funds in third at 19%. Outflows stemmed largely from U.S. equity funds (72%), followed by company stock (17%) and pre-mixed funds (9%).