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

October 9, 2019

September was a slow month for 401(k) trading with only one above-normal1 activity, according to Alight Solutions 401(k) Index™. When investors made trades, they favored fixed income funds with over 90% of net trading dollars moving from equities into fixed income.

September observations:

  • On average, 0.016% of 401(k) balances were traded daily
  • 19 of 20 days favored fixed income funds

The Alight Solutions 401(k) Index™ statistics for the month of September 2019:

Index statistics September 2019 YTD
Total transfers as percentage of starting balance 0.23% 1.77%
# Fixed days 19 (95%) 161 (86%)
# Equity days 1 (5%) 27 (14%)
# Above-normal days 1 24

 

Inflows and outflows during the month:

  • Trading inflows mainly went to stable value, bond and money market funds
  • Outflows were primarily from large U.S. equity, company stock and mid U.S. equity funds
Asset classes with most trading inflows in September Percentage of inflows Index dollar value
($ mil)
Stable value funds 44% $206
Bond funds 33% $154
Money market funds 15% $69

 

Asset classes with most trading outflows in September Percentage of outflows Index dollar value
($ mil)
Large U.S. equity funds 44% $208
Company stock 36% $168
Mid U.S. equity funds 7% $35

 

September investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities
    decreased from 67.5% in August to 67.1% in September
  • ​New contributions to equities decreased from 67.6% in August to 67.5% in September
Asset classes with largest percentage of total balance at end of September Percentage of balance Index dollar value
($ mil)
Target date2 funds 29% $62,587
Large U.S. equity funds 25% $53,398
Stable value funds 10% $21,400

 

Asset classes with most contributions in September Percentage of contribution Index dollar value
($ mil)
Target date funds 48% $484
Large U.S. equity funds 20% $203
International equity funds 7% $75

September market observations:

Equity markets were broadly positive in September with international equities (represented by the MSCI All Country World ex-U.S. Index) up 2.6%, large U.S. equities (represented by the S&P 500 Index) gaining 1.9% and small U.S. equities (represented by the Russell 2000 Index) rising 2.1%. However, U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) fell 0.5%.

Returns for common indices September 2019 YTD
Bloomberg Barclays U.S. Aggregate Index -0.5% 8.5%
S&P 500 Index 1.9% 20.6%
Russell 2000 Index 2.1% 14.2%
MSCI All Country World ex-U.S. Index (net) 2.6% 11.6%

 

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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