Last year, 401(k) participants invested heavily in fixed income instruments, according to an Alight survey.

According to Alight Solutions’ annual Investor Behavior Survey, the deterioration in equity markets last year prompted 401(k) investors to focus on adding stable and money market funds.

Stable Value experienced the largest share of trading influx last year (76%), followed by money market funds (15%) and bond funds (8%), according to the Alight Solutions 401(k) index.

The asset classes with the highest trading outflows included due date funds (53%), large US equity funds (16%) and company stocks (12%), according to the 401(k) plan index, covering more than 2 million participants with more than 200 billion dollars in Alight accounts.

Last year’s trading in fixed income securities slightly affected the overall equity-to-fixed income ratio, which was 68.2% to 31.8% last year, compared to 70.7% to 29.3% in 2021.

Net trading activity — total transfers as a percentage of opening balance — was 1.27% last year, up from 0.53% in 2021 and 3.52% in 2020.

“Over the 25+ year history of the 401(k) index, we have seen people ramp up their trading activity when stocks are down, a trend that continues into 2022.” – Robert Austin, Charlotte at Alight, Head of Research at North Carolina, the report said Wednesday.

Trading was the heaviest in the first half of 2022, he said, but trading slowed in the second half “as Wall Street tried to pick up.”

Although due date funds suffered the most outflows of trading funds last year, they also received the most contributions, reflecting their growing popularity as a qualified alternative to automatic enrollment default investments.

Among the leading contributions to contributions, due date funds (47%) are well ahead of large US equity funds (21%) and international equity funds (7%).

The due date contributions ($4.94 billion) were nearly three times the due date trade outflows ($1.77 billion) last year.

Last year, the largest number of assets were invested in fixed term funds, including fixed risk funds (29.9%); large-cap US stocks (25.7%); stable value (9.6%); and bond funds (7.4%) — same top 4 as in 2021 among 13 asset categories.

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