401(k) investors flee to safety in 2020

401(k) investors favored bond, money market and stable value funds in the first third of 2020, while shunning riskier equities and target-date funds during the coronavirus pandemic. Data from Alight Solutions 401(k) index show that in April bond funds received 31% of all retirement fund flows for a total value of $80 million, followed by self-directed brokerage flows (19% and $47 million) and money market funds (18% and $47 million).

Target-date funds saw $112 million in outflows during the month, accounting for 44% of the month's total outflows.

April's activity conveyed similar patterns to the first quarter where the most significant inflows were to bond and money markets funds, but also stable value funds, which took about half of all inflows during the period. Target-date funds and large-cap U.S. equity funds accounted for more than two-thirds of all fund flows.

The Alight Solutions 401(k) index tracks the investment activity of more than 2 million 401(k) investors at large employers who have roughly $200 billion in collective assets, according to the firm's website. The index, which was created in 1997, tracks the daily transfer activity among 13 asset classes, reporting the flow of money into and out of these asset classes and how it relates to daily stock market activity to show how world and market events affect 401(k) plan investors and their investment decisions.