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

July 10, 2018

While June was a slow month for trading in defined contribution plans, when 401(k) investors made trades, they tended to favor fixed income funds over equities, according to the Alight Solutions 401(k) IndexTM.

June observations:

  • Only one day of above-normal1 trading activity in June
  • Continued movement away from equities, with 13 of 21 days favoring fixed income funds
  • On average, 0.013% of balances were traded daily

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

Index statistics June 2018 YTD
Total transfers as percentage of starting balance 0.18% 0.68%
# Fixed days 13(62%) 67(54%)
# Equity days 8(38%) 58(46%)
# Above-normal days 1 29

 

Inflows and outflows during the month:

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

Asset classes with most trading inflows in June

  Percentage of inflows Index dollar value
($ mil)
Small U.S. equity funds 41% $153
Mid U.S. equity funds 21% $78
Stable value funds 17% $64

 

Asset classes with most trading outflows in June

  Percentage of outflows Index dollar value
($ mil)
Target date funds 36% $133
Emerging markets funds 23% $84
International funds 14% $53

 

June investment portfolios:

  • At the end of June, asset allocation in equities were in line with May, with 68.5% of assets in equities
  • 68.1% of new contributions were invested in equities at the end of  June, up slightly from 68% in May

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

  Percentage of balance Index dollar value
($ mil)
Target date funds 27% $55,571
Large U.S. equity funds 25% $49,809
Stable value funds 10% $20,431

 

Asset classes with most contributions in June

  Percentage of contributions Index dollar value
($ mil)
Target date funds 46% $492
Large U.S. equity funds 20% $213
International funds 8% $84

 

June market observations

Domestic equities experienced slightly positive market returns for the month, with both large U.S. equities (represented by the S&P 500 Index) and small U.S. equities (represented by the Russell 2000 Index) up over 1%. U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) fell -0.1%, while the International equities (represented by the MSCI All Country World ex-U.S. Index) fell close to -2%. 

Returns for common indices

  June 2018 YTD
Bloomberg Barclays U.S. Aggregate Index -0.1% -1.6%
S&P 500 Index 0.6% 2.7%
Russell 2000 Index 0.7% 7.7%
MSCI All Country World ex-U.S. Index (net) -1.9% -3.8%

 

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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