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Alight Solutions 401(k) Index™: July 2021 Observations

July was another light month of trading in 401(k) plans, according to the Alight Solutions 401(k) Index TM. Net trading activity in July was 0.07% of balances, a slight increase from 0.06% in June, but well below the trailing five-year average of 0.21%.

July observations:        
•    There were no days of above-normal1 activity and 2 days of low activity.  
•    16 of 21 days favored fixed income funds.

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

Index statistics

July

2021 YTD

Total transfers as percentage of starting balance

0.07%

0.54%

# Fixed days

16 (75%)

60 (41%)

# Equity days

5 (24%)

85 (59%)

# Above-normal days

0

2

Inflows and outflows during the month of July:
•    Trading inflows mainly went to stable value, bond and money market funds.
•    Outflows were primarily from small U.S. equity, mid U.S. equity and company stock funds.

Asset classes with most trading inflows in July

Percentage of inflows

Index dollar value ($mil)

Stable value funds

27%

$51

Bond funds

26%

$51

Money market funds

13%

$26

Asset classes with most trading outflows in July

Percentage of outflows

Index dollar value ($mil)

Small U.S. equity funds

43%

$83

Mid U.S. equity funds

32%

$61

Company stock

14%

$27

July investment portfolios:
•    After reflecting market movements and trading activity, average asset allocation in equities remained at 70.2% in July.
•    New contributions to equities increased from 69.2% in June to 69.4% in July.

Asset classes with largest percentage of total balance at the end of Jult

Percentage of balance

Index dollar value ($mil)

Target date funds2

30%

$81,193

Large U.S. equity funds

26%

$71,292

Stable value funds

8%

$20,849

 

Asset classes with most contributions in July

Percentage of contributions

Index dollar value ($mil)

Target date funds

47%

$609

Large U.S. equity funds

21%

$267

International equity funds

7%

$96

July market observations:

Returns for common indices

July

2021 YTD

Bloomberg Barclays U.S. Aggregate Index

1.1%

-0.5%

S&P 500 Index

2.4%

18.0%

Russell 2000 Index

-3.6%

13.3%

MSCI All Country World ex-U.S. Index (net)

-1.7%

7.4%

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 2 times the average daily net activity of the preceding 12 months. A “low” day is when the net daily activity is less than 0.3 times the average daily net activity for the preceding 12 months.

2Target date funds also include the amounts in target risk funds. The amount in the target risk funds is less than 10% of the total.

Members of the media: please contact Landis Cullen for questions about the Alight Solutions 401(k) Index™.  

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