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

July 15, 2019 Shruti Patel

Strong investment returns in June prompted 401(k) investors to slowly move money from equity funds to fixed income investments, according to the Alight Solutions 401(k) IndexTM

June observations:

  • On average, 0.017% of 401(k) balances were traded daily
  • 17 of 20 days favored fixed income funds

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

Index statistics June 2019 YTD
Total transfers as percentage of starting balance 0.23% 1.10%
# Fixed days 17 (85%) 107 (86%)
# Equity days 3 (15%) 17 (14%)
# Above-normal1 days 2 16

 

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, company stock, and small U.S. equity funds
Asset classes with most trading inflows in June Percentage of inflows Index dollar value
($ mil)
Bond funds 40% $180
Stable value funds 38% $174
Money market funds 16% $74

 

Asset classes with most trading outflows in June Percentage of outflows Index dollar value
($ mil)
Large U.S. equity funds 48% $217
Company stock 31% $142
Small U.S. equity funds 15% $67

 

June investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased from 67.0% in May to 67.7 % in June
  • New contributions in equities decreased from 67.9% in May to 67.7% in June
Asset classes with largest percentage of total balance at end of June Percentage of balance Index dollar value
($ mil)
Target date2 funds 29% $62,063
Large U.S. equity funds 25% $53,870
Stable value funds 10% $21,238

 

Asset classes with most contributions in June Percentage of contribution Index dollar value
($ mil)
Target date funds 48% $542
Large U.S. equity funds 20% $223
International funds 7% $80

June market observations:

The capital markets were strong in June.  Large and small U.S. equities (represented by the S&P 500 Index and Russell 2000 Index, respectively) were up 7.1%, while international equities (represented by the MSCI All Country World ex-U.S. Index) increased 6.0%. U.S. bonds (represented by Bloomberg Barclays U.S. Aggregate Index) gained 1.3%.

 

Returns for common indices June 2019 YTD
Bloomberg Barclays U.S. Aggregate Index 1.3% 6.1%
S&P 500 Index 7.1% 18.5%
Russell 2000 Index 7.1% 17.0%
MSCI All Country World ex-U.S. Index (net) 6.0% 13.6%

 

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

July was a slow trading month for 401(k) investors, according to the Alight Solutions 401(k) Index.

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