A declining month on Wall Street saw increased trading activity among 401(k) investors, according to the Alight Solutions 401(k) Index™. Net trades in May amounted to 0.21% of balances—the highest for a month this year. Additionally, there were 3 days of above-normal1 activity.
May observations:
- On average, 0.016% of 401(k) balances were traded daily
- 17 of 22 days favored fixed income funds
The Alight Solutions 401(k) Index™ statistics for the month of May 2019:
| Index statistics | May | 2019 YTD |
|---|---|---|
| Total transfers as percentage of starting balance | 0.21% | 0.87% |
| # Fixed days | 17 (77%) | 90 (87%) |
| # Equity days | 5 (23%) | 14 (13%) |
| # Above-normal1 days | 3 | 14 |
Inflows and outflows during the month:
- Trading inflows mainly went to bond, stable value, and money market funds
- Outflows were primarily from large U.S. equity, target date2, and mid U.S. equity funds
| Asset classes with most trading inflows in May | Percentage of inflows | Index dollar value ($ mil) |
|---|---|---|
| Bond funds | 57% | $255 |
| Stable value funds | 21% | $94 |
| Money market funds | 15% | $67 |
| Asset classes with most trading outflows in May | Percentage of outflows | Index dollar value ($ mil) |
|---|---|---|
| Large U.S. equity funds | 63% | $283 |
| Target date funds | 14% | $65 |
| Mid U.S. equity funds | 9% | $40 |
May investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities decreased from 68.2% in April to 67.0 % in May
- New contributions in equities remained at 67.9% from April through May
| Asset classes with largest percentage of total balance at end of May | Percentage of balance | Index dollar value ($ mil) |
|---|---|---|
| Target date funds | 29% | $57,701 |
| Large U.S. equity funds | 25% | $50,212 |
| Stable value funds | 11% | $20,995 |
| Asset classes with most contributions in May | Percentage of contribution | Index dollar value ($ mil) |
|---|---|---|
| Target date funds | 47% | $594 |
| Large U.S. equity funds | 20% | $254 |
| International funds | 7% | $90 |
May market observations:
Although U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) gained 1.8% during May, equity markets fell. Small U.S. equities (represented by the Russell 2000 Index) declined -7.8%, large U.S. equities (represented by S&P 500 Index) dropped -6.4%, and international equities (represented by the MSCI ACWI ex-US Index) were down -5.4%.
| Returns for common indices | May | 2019 YTD |
|---|---|---|
| Bloomberg Barclays U.S. Aggregate Index | 1.8% | 4.8% |
| S&P 500 Index | -6.4% | 10.7% |
| Russell 2000 Index | -7.8% | 9.3% |
| MSCI All Country World ex-U.S. Index (net) | -5.4% | 7.2% |
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.
