While June was a slow month for trading in defined contribution plans, when 401(k) investors made trades, they tended to favor fixed income funds over equities, according to the Alight Solutions 401(k) IndexTM.
June observations:
- Only one day of above-normal1 trading activity in June
- Continued movement away from equities, with 13 of 21 days favoring fixed income funds
- On average, 0.013% of balances were traded daily
The Alight Solutions 401(k) Index™ statistics for the month of June 2018:
| Index statistics | June | 2018 YTD |
|---|---|---|
| Total transfers as percentage of starting balance | 0.18% | 0.68% |
| # Fixed days | 13(62%) | 67(54%) |
| # Equity days | 8(38%) | 58(46%) |
| # Above-normal days | 1 | 29 |
Inflows and outflows during the month:
- Trading inflows mainly went to small U.S. equity, mid U.S. equity, and stable value funds
- Outflows were primarily from target date2, emerging markets, and international funds
Asset classes with most trading inflows in June
| Percentage of inflows | Index dollar value ($ mil) |
|
|---|---|---|
| Small U.S. equity funds | 41% | $153 |
| Mid U.S. equity funds | 21% | $78 |
| Stable value funds | 17% | $64 |
Asset classes with most trading outflows in June
| Percentage of outflows | Index dollar value ($ mil) |
|
|---|---|---|
| Target date funds | 36% | $133 |
| Emerging markets funds | 23% | $84 |
| International funds | 14% | $53 |
June investment portfolios:
- At the end of June, asset allocation in equities were in line with May, with 68.5% of assets in equities
- 68.1% of new contributions were invested in equities at the end of June, up slightly from 68% in May
Asset classes with largest percentage of total balance at end of June
| Percentage of balance | Index dollar value ($ mil) |
|
|---|---|---|
| Target date funds | 27% | $55,571 |
| Large U.S. equity funds | 25% | $49,809 |
| Stable value funds | 10% | $20,431 |
Asset classes with most contributions in June
| Percentage of contributions | Index dollar value ($ mil) |
|
|---|---|---|
| Target date funds | 46% | $492 |
| Large U.S. equity funds | 20% | $213 |
| International funds | 8% | $84 |
June market observations
Domestic equities experienced slightly positive market returns for the month, with both large U.S. equities (represented by the S&P 500 Index) and small U.S. equities (represented by the Russell 2000 Index) up over 1%. U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) fell -0.1%, while the International equities (represented by the MSCI All Country World ex-U.S. Index) fell close to -2%.
Returns for common indices
| June | 2018 YTD | |
|---|---|---|
| Bloomberg Barclays U.S. Aggregate Index | -0.1% | -1.6% |
| S&P 500 Index | 0.6% | 2.7% |
| Russell 2000 Index | 0.7% | 7.7% |
| MSCI All Country World ex-U.S. Index (net) | -1.9% | -3.8% |
Members of the media: please contact MacKenzie Lucas for questions about the Alight Solutions 401(k) Index™.
Learn more about the Alight Solutions 401(k) Index™ here.
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