401(k) Trading in October Muted; Hints of Activity from Sales of Company Stock
Activity was concentrated in a small number of plans, according to Alight.
Trading by the holders of defined contribution retirement accounts remained modest in October, hinted by sales of company stock, according to the October 2026 update to Alight Solutions’ 401(k) index.
The trading direction was evenly split last month, with fixed income favored on 11 of 22 trading days. Equities prevailed on six of the first nine trading days, while fixed income led on eight of the final 13. Total transfers represented 0.06% of starting balances, unchanged from September.
Adam Vredeveld, an Alight senior client manager for defined contribution, says October’s low trading volume fits within the broader context of a “relatively calm” 2026. Even during a market downturn in March, in the wake of the start of the global conflict in Iran, the market response was muted compared to a similar downturn in early 2025.
Strong earnings-driven gains in a small number of company stock funds prompted participants to realize profits in October, with company stock accounting for 33% of all trading outflows. That activity was concentrated at month-end, producing the only above-normal trading days of the month on October 29 (1.95 times the average) and October 30 (2.10 times the average).
Although some participants locked in profits, their portfolios remained heavily invested in equities, with allocations holding steady at 74% of balances, while target-date funds and large-cap U.S. funds continued to receive about three-quarters of contributions.
“The contrast suggests that while some participants used strong gains in select holdings to rebalance and capture profits, long-term saving and investment behavior remained largely unchanged,” the monthly update stated.
Beyond company stock, 18% of outflows were from premixed funds and 17% were from self-directed windows. Inflows were concentrated in stable value funds, at 50%, money market funds at 20% and large-cap U.S. equity funds at 19%.
Alight reported that 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 company’s index, equals between 0.3 times and 1.5 times the average daily net activity of the preceding 12 months. 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. An “high” day of relative transfer activity is when the net daily movement exceeds twice the average daily net activity.