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Alight Solutions 401(k) Index™: 2021 Observations

As Wall Street had another banner year in 2021, 401(k) investors were infrequent traders and mostly content to watch their balances grow, according to the Alight Solutions 401(k) IndexTM. Net trading activity for the year was 0.53% of balances, the lowest on record for the 401(k) Index, which started in 1997, and well below 2020’s value of 3.51%. There were 3 days of above-normal1 activity, a stark contrast to the 47 seen in 2020 when the market was much more volatile. 

When trades occurred, they tended to see people in profit-taking mode, moving money from large cap U.S. equities and target date2 funds into more conservative investments like stable value and bond funds. 

401(k) investors increased their equity exposure in 2021 from 67.7% at the beginning of the year to 70.7% at the end of the year. This is primarily due to 3 factors: light trading activity during the year, new contributions overwhelmingly favoring equities, and near-record highs in equity markets. The last time a year closed with an equity percentage over 70% was 2000 (73%).

Asset classes with most trading inflows in 2021

Percentage of

Index dollar value
($ mil)

Stable value funds



Bond funds



Specialty/Sector funds



Asset classes with most trading outflows in 2021

Percentage of

Index dollar value
($ mil)

Large U.S. equity funds



Target date2 funds



Company stock



Asset classes with most contributions in 2021

Percentage of

Index dollar value
($ mil)

Target date funds



Large U.S. equity funds



International funds



After reflecting contributions, trades, and market activity, 401(k) investors ended 2021 with 70.7% in equities, up significantly from 67.7% at the beginning of the year.

Index statistics


Total transfers as percentage of starting balance


# Fixed days

137 (54%)

# Equity days

115 (46%)

# Above normal days


The following table shows the returns of major market indices for the year ending December 31, 2021:

Return for common indices


Bloomberg Barclays Capital U.S. Aggregate Bond Index


S&P 500 Index


Russell 2000 Index


MSCI All Country World ex-U.S.A. Index (net)


1 A “normal” level of relative transfer activity is when the net daily movement of participants’ balances, as a percent of total 401(k) balances within the Alight Solutions 401(k) Index™ equals between 0.3 times and 1.5 times the average daily net activity of the preceding 12 months. A “high” relative transfer activity day is when the net daily movement exceeds two times the average daily net activity. A “moderate” relative transfer activity day is when the net daily movement is between 1.5 and 2 times the average daily net activity of the preceding 12 months.

2 Target date funds also include the amounts in target risk funds. The amount in the target risk funds is less than 10% of the total.

Related Insights

Alight Solutions 401(k) Index™: July 2022 Observations

401(k) plan investors were light traders in July, according to the Alight 401(k) Index™. There were no above-normal trading days as Wall Street posted its best month since November 2020.

Alight Solutions 401(k) Index™

Monthly and quarterly Alight Solutions 401(k) Index Reports

Alight Solutions 401(k) Index™: Full Year 2020 observations

In 2020, 401(k) investors were busy traders out of equities as stocks were falling and slowly returned to them after their rebound.