Alight Solutions 401(k) Index™: May 2019 Observations

June 11, 2019 Shruti Patel

A declining month on Wall Street saw increased trading activity among 401(k) investors, according to the Alight Solutions 401(k) Index™. Net trades in May amounted to 0.21% of balances—the highest for a month this year. Additionally, there were 3 days of above-normal1 activity.

May observations:

  • On average, 0.016% of 401(k) balances were traded daily
  • 17 of 22 days favored fixed income funds

The Alight Solutions 401(k) Index™ statistics for the month of May 2019:

Index statistics May 2019 YTD
Total transfers as percentage of starting balance 0.21% 0.87%
# Fixed days 17 (77%) 90 (87%)
# Equity days 5 (23%) 14 (13%)
# Above-normal1 days 3 14

 

Inflows and outflows during the month:

  • Trading inflows mainly went to bond, stable value, and money market funds
  • Outflows were primarily from large U.S. equity, target date2, and mid U.S. equity funds
Asset classes with most trading inflows in May Percentage of inflows Index dollar value
($ mil)
Bond funds 57% $255
Stable value funds 21% $94
Money market funds 15% $67

 

Asset classes with most trading outflows in May Percentage of outflows Index dollar value
($ mil)
Large U.S. equity funds 63% $283
Target date funds 14% $65
Mid U.S. equity funds 9% $40

 

May investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities decreased from 68.2% in April to 67.0 % in May
  • New contributions in equities remained at 67.9% from April through May
Asset classes with largest percentage of total balance at end of May Percentage of balance Index dollar value
($ mil)
Target date funds 29% $57,701
Large U.S. equity funds 25% $50,212
Stable value funds 11% $20,995

 

Asset classes with most contributions in May Percentage of contribution Index dollar value
($ mil)
Target date funds 47% $594
Large U.S. equity funds 20% $254
International funds 7% $90

May market observations:

Although U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) gained 1.8% during May, equity markets fell. Small U.S. equities (represented by the Russell 2000 Index) declined -7.8%, large U.S. equities (represented by S&P 500 Index) dropped -6.4%, and international equities (represented by the MSCI ACWI ex-US Index) were down -5.4%. 

 

Returns for common indices May 2019 YTD
Bloomberg Barclays U.S. Aggregate Index 1.8% 4.8%
S&P 500 Index -6.4% 10.7%
Russell 2000 Index -7.8% 9.3%
MSCI All Country World ex-U.S. Index (net) -5.4% 7.2%

 

Members of the media: please contact Dominic Belmonte for questions about the Alight Solutions 401(k) Index™.

Learn more about the Alight Solutions 401(k) Index™ here.

  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 two 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.

 

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