Alight Solutions 401(k) Index™: Second Quarter 2019 Observations

July 15, 2019 Shruti Patel

Throughout the second quarter, 401(k) investors traded from equities to fixed income funds, according to the Alight Solutions 401(k) IndexTM. The steady stream of trades in one direction made for the heaviest quarter of net trading since the third quarter of 2016. 

Second quarter observations:

  • Net transfers for the quarter were 0.61% of balances
  • 53 out of 63 trading days in the second quarter had net trading dollars moving from equities to fixed income

Alight Solutions 401(k) Index™ statistics for Q2 2019 and year-to-date:

Index Statistics Q2 2019 2019 YTD
Net transfers as percentage of starting balance 0.61% 1.10%
# Fixed days 53 (84%) 107 (86%)
# Equity days 10 (16%) 17 (14%)
# Above-normal1 days 7 16

 

Asset classes with most trading inflows in Q2 2019 Percentage of inflows Index dollar value
($ mil)
Bond funds 55% $661
Stable value funds 23% $283
Money market funds 14% $171

 

Asset classes with most trading outflows in Q2 2019 Percentage of outflows Index dollar value
($ mil)
Large U.S. equity funds 55% $669
Company stock 23% $278
International funds 12% $141

 

Second quarter market observations:

Despite a dip in the middle of the quarter, most major market indices rose during Q2 2019. Large U.S. equities (represented by S&P 500 Index) were up 4.3%, small U.S. equities (represented by Russell 2000 Index) gained 2.1%, and international equities (represented by MSCI All Country World ex-U.S. Index) rose by 3.0%. U.S. bonds (represented by Bloomberg Barclays U.S. Aggregate Index) gained 3.1%.

 

Returns for common indices Q2 2019 2019 YTD
Bloomberg Barclays U.S. Aggregate Index 3.1% 6.1%
S&P 500 Index 4.3% 18.5%
Russell 2000 Index 2.1% 17.0%
MSCI All Country World ex-U.S. Index (net) 3.0% 13.6%

 

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 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.

 

 

 

Previous Article
Everest Group PEAK Matrix™ for Workday-Based Human Resources Business Process Services (HR BPS) 2019
Everest Group PEAK Matrix™ for Workday-Based Human Resources Business Process Services (HR BPS) 2019

named a Leader and Star Performer in the Everest Group PEAK Matrix™ for Workday-Based Human Resources Busin...

Next Article
Alight Solutions 401(k) Index™: June 2019 Observations
Alight Solutions 401(k) Index™: June 2019 Observations

Strong investment returns in June prompted 401(k) investors to slowly move money from equity funds to fixed...