Alight Solutions 401(k) Index™: September 2018 Observations

October 12, 2018

In September, trading in 401(k) plans was among the lowest on record, according to the Alight Solutions 401(k) IndexTM. Net daily trading activity for the month was 0.0119% of balances, the second lowest month since the Index’s inception in 1997 and the lowest month since July 2017 (0.0118%).

For the third consecutive month, September had no days of above-normal1 trading activity. In the more than 20-year history of the 401(k) Index, this is only the second time that three consecutive months have experienced no days of above-normal trading activity. The only other time this happened was January through March of 2017.

September observations:

  • In September, 15 of 19 days favored fixed income funds
  • On average, 0.012% of 401(k) balances were traded daily

The Alight Solutions 401(k) Index™ statistics for the month of September 2018:

Index statistics September 2018 YTD
Total transfers as percentage of starting balance 0.13% 1.02%
# Fixed days 15(79%) 110(59%)
# Equity days 4(21%) 78(42%)
# Above-normal days 0 29

 

Inflows and outflows during the month:

  • Trading inflows mainly went to stable value, large U.S. equity, and mid U.S. equity funds
  • Outflows were primarily from company stock, target date2, and emerging markets funds

Asset classes with most trading inflows in September

  Percentage of inflows Index dollar value
($ mil)
Stable value funds 47% $132
Large U.S. equity funds 14% $41
Mid U.S. equity funds 14% $39

 

Asset classes with most trading outflows in September

  Percentage of outflows Index dollar value
($ mil)
Company stock funds 40% $112
Target date funds 39% $111
Emerging market funds 9% $25

 

September investment portfolios:

  • Asset allocation in equities decreased to 68.9% at the end of September from 69.2% at the end of August, returning to equity allocations seen in July
  • New contributions in equities decreased slightly from 68.1% in August to 68.0% in September

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

  Percentage of balance Index dollar value
($ mil)
Target date funds 27% $55,089
Large U.S. equity funds 25% $51,011
Stable value funds 10% $20,626

 

Asset classes with most contributions in September

  Percentage of contributions Index dollar value
($ mil)
Target date funds 47% $467
Large U.S. equity funds 20% $195
International funds 8% $76

 

September market observations

Domestic equities delivered mixed returns for the month, with large U.S. equities (represented by the S&P 500 Index) up 0.6% and small U.S. equities (represented by the Russell 2000 Index) falling -2.4%. International equities (represented by the MSCI All Country World ex-U.S. Index) returned 0.5% and U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) dropped -0.6%.

Returns for common indices

  September 2018 YTD
Bloomberg Barclays U.S. Aggregate Index -0.6% -1.6%
S&P 500 Index 0.6% 10.7%
Russell 2000 Index -2.4% 11.5%
MSCI All Country World ex-U.S. Index (net) 0.5% -3.1%

 

Members of the media: please contact MacKenzie Lucas 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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