Participants in 401(k) plans traded more often on April 7 than any other day since March 12, 2020, in the early days of the COVID-19 pandemic, Alight reported April 8.
Daily trading volume was 9.7 times the average as tracked by the Alight Solutions 401(k) index, and April 7 represented the fifth-heaviest trading day since Alight started its index in 1997.
“Historically, when stock markets have large losses on Fridays, we see very high trading activity in 401(k) plans on the following Monday,” said Robert Austin, Alight’s head of thought leadership, in a news release.
The Dow Jones Industrial Average fell 5.5% and the S&P 500 index lost 6% on April 4.
“This is because people react to the news by making portfolio adjustments over the weekend, which do not get executed until Monday,” he said. “Even so, the trading level on April 7 was historically high.”
The index is based on 401(k) trading activity of more than 2 million people with more than $200 billion in collective assets.
Investors moved to fixed income from equities, and the $290 million in net trading activity was the 10th highest in the index’s history, the Alight report said.
“Monday’s trading level was about a month’s worth of net trading,” the report said, comparing April 7 to the average monthly trading level between January 2021 and December 2024.
The biggest April 7 inflows were stable value ($139 million, or 48% of inflows), bond funds ($100 million, or 34%), and money market funds ($48 million, or 17%).
The biggest outflows were large-cap U.S. equities ($124 million, or 43% of outflows) and target-date funds ($94 million, or 32%).
For the first seven days in April, Alight reported $480 million in net trading activity among 401(k) plan participants.
“Balance at beginning of April was $262 billion for 0.18% of balances traded,” the Alight report said. “Average monthly trading levels in recent years is 0.12%, so more has been traded in a week than typically seen in a month.”
During that first week in April, the biggest inflows were stable value ($242 million, or 51% of inflows); bond funds ($147 million, or 31%); and money market funds ($76 million, or16%).
The biggest outflows came from large-cap U.S. equities ($217 million or, 45% of outflows) and target-date funds ($173 million, or 32%).
