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

August 6, 2019

July was a slow trading month for 401(k) investors, according to the Alight Solutions 401(k) IndexTM, with only one above-normal1 day. July marks the 18th month in a row that net trades have flowed from equities to fixed income funds.

July observations:

  • On average, 0.014% of 401(k) balances were traded daily
  • 19 of 22 days favored fixed income funds

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

Index statistics July 2019 YTD
Total transfers as percentage of starting balance 0.17% 1.26%
# Fixed days 19 (86%) 126 (86%)
# Equity days 3 (14%) 20 (14%)
# Above-normal days 1 17

 

Inflows and outflows during the month:

  • Trading inflows mainly went to bond, international equity, and money market funds
  • Outflows were primarily from company stock, large U.S. equity, and small U.S. equity funds
Asset classes with most trading inflows in July Percentage of inflows Index dollar value
($ mil)
Bond funds 52% $189
International equity funds 14% $51
Money market funds 12% $43

 

Asset classes with most trading outflows in July Percentage of outflows Index dollar value
($ mil)
Company stock 42% $154
Large U.S. equity funds 40% $143
Small U.S. equity funds 9% $33

 

July investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities was 67.7%—unchanged from June to July
  • New contributions to equities also remained at 67.7%—the same level as June
Asset classes with largest percentage of total balance at end of July Percentage of balance Index dollar value
($ mil)
Target date2 funds 29% $62,166
Large U.S. equity funds 25% $54,291
Stable value funds 10% $21,188

 

Asset classes with most contributions in July  Percentage of contribution Index dollar value
($ mil)
Target date funds 47% $511
Large U.S. equity funds 20% $220
International funds 7% $79

July market observations:

Capital market returns were mixed in July with large U.S. equities (represented by the S&P 500 Index) gaining 1.4%, small U.S. equities (represented by the Russell 2000 Index) returning 0.6%, U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) rising 0.2%, but international equities (represented by the MSCI All Country World ex-U.S. Index) fell 1.2%.

 

Returns for common indices July 2019 YTD
Bloomberg Barclays U.S. Aggregate Index 0.2% 6.4%
S&P 500 Index 1.4% 20.2%
Russell 2000 Index 0.6% 17.7%
MSCI All Country World ex-U.S. Index (net) -1.2% 12.2%

 

Members of the media: please contact Dominic Belmonte 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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