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

November 7, 2019

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.

  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 is when the net daily movement  exceeds two times the average daily net activity. A “moderate” relative transfer activity 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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