A rising stock market coupled with steady, longer-term trades into equity investments brought 401(k) investors to their highest level of equity exposure since 2001, according to the newly-released Alight Solutions 401(k) Index.
With growth coming almost exclusively from stock market returns, the average asset allocation in equities rose to 69.8% at the end of April, the highest value since June 2001. New contributions to equities remained at 69.9%, unchanged from March.
Seventeen trading days in the month favored equity funds and four days favored fixed income funds, the survey showed.
Asset classes with the most trading inflows in April were large U.S. equities (taking in 44% of inflows valued at $184 million) followed by target date funds (17% inflows; $171 million) and international equities (16% inflows; $68 million).
Asset classes with the most trading outflows in April were stable value funds (48% outflows; $204 million), bond funds (24% outflows; $106 million) and money market funds (13% outflows; $53 million).
Last month the S&P 500 was up 5.3%, the Russell 2000 was up 2.1%, and the MSCI All Country World ex-U.S. index was up 2.9%, while Bloomberg Barclays U.S. Aggregate index inched up 0.8%.
Trading done by 401(k) investors netted an average increase of a mere 0.013% of 401(k) balances—the lowest value since December 2019.
401(k) investors transferred an average of 0.16% of their starting balance during the month. Year-to-date, this has been a total of 0.56%.