October was another slow month for 401(k) trading, according to the Alight Solutions 401(k) IndexTM. The overwhelming majority of days saw net trading activity move from equities to fixed income funds. There was one day of above-normal1 trading.
October observations:
- On average, 0.015% of 401(k) balances were traded daily
- 21 of 23 days favored fixed income funds
The Alight Solutions 401(k) Index™ statistics for the month of October 2019:
| Index statistics | October | 2019 YTD |
|---|---|---|
| Total transfers as percentage of starting balance | 0.20% | 1.98% |
| # Fixed days | 21 (91%) | 182 (86%) |
| # Equity days | 2 (9%) | 29 (14%) |
| # Above-normal days | 1 | 25 |
Inflows and outflows during October:
- Trading inflows mainly went to stable value, bond and money market funds
- Outflows were primarily from company stock, large U.S. equity and small U.S. equity funds
Inflows and outflows during October:
| Asset classes with most trading inflows in October | Percentage of inflows | Index dollar value ($ mil) |
|---|---|---|
| Stable value funds | 41% | $176 |
| Bond funds | 30% | $130 |
| Money market funds | 16% | $67 |
| Asset classes with most trading outflows in October | Percentage of outflows | Index dollar value ($ mil) |
|---|---|---|
| Company stock | 52% | $222 |
| Large U.S. equity funds | 32% | $135 |
| Small U.S. equity funds | 8% | $33 |
October investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities increased from 67.1% in September to 67.3% in October
- New contributions to equities decreased from 67.5% in September to 67.4% in October
| Asset classes with largest percentage of total balance at end of October | Percentage of balance | Index dollar value ($ mil) |
|---|---|---|
| Target date2 funds | 29% | $63,863 |
| Large U.S. equity funds | 25% | $54,389 |
| Stable value funds | 10% | $21,497 |
| Asset classes with most contributions in October | Percentage of contribution | Index dollar value ($ mil) |
|---|---|---|
| Target date funds | 48% | $530 |
| Large U.S. equity funds | 20% | $216 |
| International equity funds | 7% | $78 |
October market observations:
October saw gains broadly for capital market indices with international equities (represented by the MSCI All Country World ex-U.S. Index) rising 3.5%, small U.S. equities (represented by the Russell 2000 Index) gaining 2.6%, large U.S. equities (represented by the S&P 500 Index) advancing 2.2% and U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) earning 0.3%.
| Returns for common indices | October | 2019 YTD |
|---|---|---|
| Bloomberg Barclays U.S. Aggregate Index | 0.3% | 8.9% |
| S&P 500 Index | 2.2% | 23.2% |
| Russell 2000 Index | 2.6% | 17.2% |
| MSCI All Country World ex-U.S. Index (net) | 3.5% | 15.5% |
Members of the media: please contact Landis Cullen for questions about the Alight Solutions 401(k) Index™.
Learn more about the Alight Solutions 401(k) Index™ here.
