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Alight Solutions 401(k) Index™: May 2020 observations

May was the lightest month of trading activity for 401(k) investors in 2020, according to the Alight Solutions 401(k) Index™. On average, 0.018% of balances were traded daily—down from 0.023% in April and 0.078% in March. May had no above-normal1 days of trading activity.

May observations:

  • On average, 0.018% of 401(k) balances were traded daily
  • 13 of 20 days favored fixed income funds

 

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

Index statistics May 2020 YTD
Total transfers as percentage of starting balance 0.11% 1.72%
# Fixed days 13 (65%) 65 (63%)
# Equity days 7 (35%) 38 (37%)
# Above-normal days 0 32

 

Inflows and outflows during May:

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

 

Asset classes with most trading inflows in May

  Percentage of inflows Index dollar value ($ mil)
Bond funds 31% $73
International equity funds 23% $53
Money market funds 19% $44

 

Asset classes with most trading outflows in May

  Percentage of outflows Index dollar value ($ mil)
Target date funds 48% $113
Large U.S. equity funds 28% $65
Company stock 13% $31

 

May investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased from 64.7% in April to 65.4% in May
  • New contributions to equities remained at 67.2% 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% $61,582
Large U.S. equity funds 25% $53,548
Stable value funds 11% $22,608

 

Asset classes with most contributions in May

  Percentage of contributions Index dollar value ($ mil)
Target date funds 46% $513
Large U.S. equity funds 21% $230
International equity funds 7% $76

 

May market observations:

Continuing the trend from April, all followed benchmarks had positive returns for May. Small U.S. equity (represented by the Russell 2000 Index) rose 6.5%, large U.S. equity (represented by the S&P 500 Index) gained 4.8%, international equity (represented by the MSCI All Country World ex-U.S. Index) was up 3.3%, and U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) rising 0.5%.

 

Returns for common indices

  May 2020 YTD
Bloomberg Barclays U.S. Aggregate Index 0.5% 5.5%
S&P 500 Index 4.8% -5.0%
Russell 2000 Index 6.5% -16.0%
MSCI All Country World ex-U.S. Index (net) 3.3% -14.9%

 

 

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.


  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 two times the average daily net activity of the preceding 12 months.

  2. 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.


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Alight Solutions 401(k) Index: Second Quarter 2021 Observations

401(k) trading activity was remarkably light in the second quarter, according to the Alight Solutions 401(k) IndexTM.

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