Alight Solutions 401(k) Index™: July 2017 Observations

August 7, 2017 Shruti Patel

July was the lightest trading month for defined contribution plan investors in over five years. Just 0.11% of balances were traded in the month — the lowest level since April 2012 and the second lowest month since 1997 when the Index was started.

July observations:

  • On average, 0.012% of balances traded each day
  • There was one day of above normal 1 trading

The Alight Solutions 401(k) Index™ statistics for the month ending July 31, 2017:

Index statistics July 2017 YTD
Total transfers as percentage of starting balance 0.11% 0.90%
# Fixed days 9(45%) 68(47%)
# Equity days 11(55%) 77(53%)
# Above normal1 days 1 3

 

Inflows and outflows during the month:

  • The majority of trading inflows went to non-U.S. funds with 46% of inflows going to international funds and 15% to emerging market funds
  • Outflows were primarily company stock, stable value, and small U.S. equity funds

 

Asset classes with most trading inflows in July

  Percentage of inflows Index dollar value
($ mil)
International funds 46% $99
Emerging market funds 15% $33
Target date2 funds 15% $32

 

Asset classes with most trading outflows in July

  Percentage of outflows Index dollar value
($ mil)
Company stock 52% $111
Stable value funds 11% $25
Small U.S. equity funds 11% $24

 

July investment portfolios:

  • At the end of July, 67.4% of balances were invested in equities, up from 67.0% at the end of June
  • 67.3% of new contributions were invested in equities, up from 67.1% in June

 

Asset classes with largest percentage of total balance at end of July

  Percentage of balance Index dollar value
($ mil)
Target date funds 25% $47,749
Large U.S. equity funds 24% $44,739
Stable value funds 11% $20,807

 

Asset classes with most contributions in July

  Percentage of contributions Index dollar value
($ mil)
Target date funds 44% $430
Large U.S. equity funds 20% $191
International funds 8% $78

 

July market observations
In July, capital markets saw positive results, as the extended Bull Market continues forward, with strong returns in large U.S. equity funds (represented by the S&P 500 Index) and international funds (represented by the MSCI All Country World ex-U.S. Index).

Returns for common indices

  July 2017 YTD
Bloomberg Barclays U.S. Aggregate Index 0.4% 2.7%
S&P 500 Index 2.1% 11.6%
Russell 2000 Index 0.7% 5.8%
MSCI All Country World ex-U.S. Index (net) 3.7% 18.3%

 

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

  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 for companies who do not have target date funds. The amount in the target risk funds is less than 10% of the total.
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Alight Solutions 401(k) Index™
Alight Solutions 401(k) Index™

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