Trading activity within 401(k) plans was 10 times higher than average on Monday, according to Alight Solutions’ 401(k) index.
With $290 million in motion, Monday was the fifth highest-volume trading day in the nearly three-decade history of the index. Virtually all of the money moved toward “safe” assets.
Specifically, inflows to stable value clocked in at $139 million (48% of inflows), while bond funds netted $100 million (34%) and money market funds collected $48 million (17%). Only about 1% moved toward stock funds. Outflows of $124 million came from large-cap U.S. equities (43% of outflows), while $94 million (32%) flowed out of target-date funds.
According to the index, between January 2021 and December 2024, the average monthly trading level for all 401(k) balances was 0.12%. In other words, Monday’s trading level was about a month’s worth of net trading.
“Historically, when stock markets have large losses on Fridays, we see very high trading activity in 401(k) plans on the following Monday,” observed Rob Austin, head of thought leadership at Alight. “This is because people react to the news by making portfolio adjustments over the weekend, which do not get executed until Monday. Even so, the trading level on April 7th was historically high.”
Credit: Adobe Stock
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.