Alight Solutions 401(k) Index: June 2020 Observations

June saw an uptick in 401(k) trading activity, according to the Alight Solutions 401(k) Index™. The total net transfers as a percentage of starting balance was 0.26%—much higher than 0.11% in May and 0.13% in April, but significantly lower than 0.96% in March. There were three days of above-normal¹ activity.

June observations:

On average, 0.023% of 401(k) balances were traded daily
17 of 22 days favored fixed income funds

Alight Solutions 401(k) Index statistics for June 2020:

Index statistics	June	2020 YTD
Total transfers as percentage of starting balance	0.26%	1.96%
# Fixed days	17 (77%)	82 (66%)
# Equity days	5 (23%)	43 (34%)
# Above-normal days	3	35

Inflows and outflows during June:

Trading inflows mainly went to bond, stable value and money market funds
Outflows were primarily from large U.S. equity, target date² and company stock funds

Asset classes with most trading inflows in June

	Percentage of inflows	Index dollar value ($ mil)
Bond funds	62%	$335
Stable value funds	26%	$139
Money market funds	10%	$55

Asset classes with most trading outflows in June

	Percentage of outflows	Index dollar value ($ mil)
Large U.S. equity funds	45%	$245
Target date funds	24%	$129
Company stock	13%	$69

June investment portfolios:

After reflecting market movements and trading activity, average asset allocation in equities increased from 65.4% in May to 65.6% in June
New contributions to equities increased from 67.2% in May to 67.5% in June

Asset classes with largest percentage of total balance at end of June

	Percentage of balance	Index dollar value ($ mil)
Target date funds	29%	$62,802
Large U.S. equity funds	25%	$54,482
Stable value funds	10%	$22,655

Asset classes with most contributions in June

	Percentage of contributions	Index dollar value ($ mil)
Target date funds	46%	$483
Large U.S. equity funds	21%	$219
International equity funds	7%	$76

June market observations:

June saw moderate returns across all indices with international equities (represented by the MSCI All Country World ex-U.S. Index) leading, up 4.5%. U.S. equities followed, with small U.S. equities (represented by the Russell 2000 Index) rising 3.5% and large U.S. equities (represented by the S&P 500 Index) gaining 2.0%. U.S. bonds (represented by Bloomberg Barclays U.S. Aggregate Index) were also up 0.6%.

Returns for common indices

	June	2020 YTD
Bloomberg Barclays U.S. Aggregate Index	0.6%	6.1%
S&P 500 Index	2.0%	-3.1%
Russell 2000 Index	3.5%	-13.0%
MSCI All Country World ex-U.S. Index (net)	4.5%	-9.8%

Members of the media: please contact Landis Cullen 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.