(Yahoo! Finance) - Retirement investors made safe bets in August, according to Alight Solutions’ 401(k) Index, quietly moving their nest egg savings into fixed-income options from equities.
The cautious mood was palpable.
Trading levels in retirement accounts were eerily quiet with no above-normal trading days last month, per the index. When investors in 401(k)s did make moves, they shifted from large and small US equity funds and company stock into more conservative bonds and, to a smaller degree, money market funds and emerging market funds.
“Risk aversion took hold of investors again in August following a brief recovery in July,” according to the S&P Global Investment Manager Index. “Jitters have notably risen regarding both the macro and political environments. Sector preferences have tilted towards a more defensive positioning.”
What we say vs. what we do
Those conservative money moves stand in contrast to what many retirement savers say they’re craving: riskier private assets.
Nearly half of investors participating in 401(k) and similar workplace retirement savings plans say they would invest in private equity and private debt if their plan offered them, according to investment manager Schroders' 2025 US Retirement Survey.
In fact, more than 3 in 4 say they would increase their paycheck contributions to their plan to fully take advantage of the opportunity.
“Demand for access to private markets is on the rise,” Deb Boyden, head of US defined contribution at Schroders, told Yahoo Finance.
Private assets are already legal in workplace retirement plans, but President Trump's recent executive order will ease the way for wider adoption. The directive instructs the Department of Labor and the Securities and Exchange Commission to draft guidance for defined-contribution plans to incorporate these types of investments so they meet the fiduciary requirement plan providers must adhere to, such as acting solely in the interest of the participants and their beneficiaries.
Plans are getting ready
It shouldn’t be long before we find out just how brave retirement investors really are when it’s time to take action.
Nearly 1 in 4 plan sponsors say they are considering adding alternative assets to their plan, according to a BlackRock report released Monday.
Goldman Sachs (GS) is taking up to a $1 billion stake in global asset manager T. Rowe Price (TROW) with the goal of opening the doors to offer private assets to US retirees by mid-2026.
The firms plan to offer new, co-branded target-date funds that blend private assets, such as private equity, credit, infrastructure, and real estate funds, alongside public bonds and stocks.
BlackRock (BLK) has already jumped into the arena, announcing a target-date fund consisting of private credit, private equity, and other investments, aiming to increase the annual return by an extra 0.5% — which would translate to roughly 15% more money in your 401(k) over 40 years.
Empower, the second-largest retirement services provider in the US, also plans to offer private equity, credit, and real estate in some of its retirement portfolios later this year. Voya Financial and alternative asset manager Blue Owl Capital are partnering to create private markets products for defined-contribution plans.
Earlier this year, real estate and private equity giant Blackstone (BX) announced a similar partnership with Vanguard and Wellington Management to jointly develop “multi-asset investment solutions” that offer individual investors exposure to both private and public markets.
By Kerry Hannon - Senior Columnist
