Alight Solutions 401k Index: August 2019 Observations

A volatile August on Wall Street spurred higher than normal 401(k) trading activity according to the Alight Solutions 401(k) Index™. Net trading activity for the month was the highest in 2019 at 0.24% of balances. Additionally, there were six above-normal¹ days, the highest monthly total since December 2018.

August observations:

19th month in a row that net trades have flowed from equities to fixed income
16 of 22 days favored fixed income funds

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

Index statistics

	August	2019 YTD
Total transfers as percentage of starting balance	0.24%	1.54%
# Fixed days	16 (73%)	142 (85%)
# Equity days	6 (27%)	26 (15%)
# Above normal days	6	23

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 August

	Percentage of inflows	Index dollar value ($ mil)
Bond funds	50%	$263
Stable value funds	29%	$150
Money market funds	18%	$94

Asset classes with most trading outflows in August

	Percentage of outflows	Index dollar value ($ mil)
Large U.S. equity funds	55%	$291
Target date funds	17%	$92
Mid U.S. equity funds	10%	$55

Agust investment portfolios:

After reflecting market movements and trading activity, average asset allocation in equities decreased from 67.7% in July to 67.5% in August
New contributions to equities decreased from 67.7% in July to 67.6% in August

Asset classes with largest percentage of total

	Percentage of balance	Index dollar value ($ mil)
Target date funds	30%	$61,672
Large U.S. equity funds	25%	$50,621
Stable value funds	9%	$18,157

Asset classes with most contributions in August

	Percentage of contribution	Index dollar value ($ mil)
Target date funds	48%	$559
Large U.S. equity funds	20%	$230
International equity funds	7%	$84

August market observations:

Equities fell during the month of August with small U.S. equities (represented by the Russell 2000 Index) losing 4.9%, large U.S. equities (represented by the S&P 500 Index) falling 1.6% and international equities (represented by the MSCI All Country World ex-U.S. Index) dropping 3.1%. Fixed income investors fared better with U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) gaining 2.6%.

Returns for common indices

	August	2019 YTD
Bloomberg Barclays U.S. Aggregate Index	2.6%	9.1%
S&P 500 Index	-1.6%	18.3%
Russell 2000 Index	-4.9%	11.9%
MSCI All Country World ex-U.S. Index (net)	-3.1%	8.8%

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.

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.
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.