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Alight Solutions 401(k) Index™: May 2021 observations

401(k) investors bucked the adage to "sell in May and stay away," according to the Alight Solutions 401(k) Index. On average, net daily trading was 0.011% of 401(k) balances—the lowest monthly value in the more than 20-year history of the 401(k) Index.

May observations:    

  • There was one day of above-normal1 activity—the first since January. 
  • Monthly net trading activity was 0.09% of balances, the lowest level on record and less than half the monthly average for the trailing five-year period (0.22%).
  • 12 days favored fixed income (60% of days in May).
 
The Alight Solutions 401(k) Index statistics for the month of May:
 

Index statistics

May

2021 YTD

Total transfers as percentage of starting balance

0.09%

0.56%

# Fixed days

12 (60%)

34 (33%)

# Equity days

8 (40%)

68 (67%)

# Above-normal days

1

2

 
 

Inflows and outflows during the month of May:

  • Trading inflows mainly went to stable value, international, and specialty funds.
  • Outflows were primarily from company stock, as well as large and small U.S. equity funds.

 

Asset classes with most trading inflows in May

Percentage of inflows 

Index dollar value ($mil) 

Stable value

53%

$129

International

17%

$42

Specialty/Sector

9%

$22

     

Asset classes with most trading outflows in May

Percentage of outflows 

Index dollar value ($mil) 

Company stock

44%

$106

Large U.S. equity

28%

$67

Small U.S. equity

13%

$31

 

May investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased from 69.8% in April to 69.9% in May.
  • New contributions to equities increased from 68.9% in April to 69.2% in May.

 

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

Percentage of balance 

Index dollar value ($mil) 

Target date funds2

30%

$79,672

Large U.S. equity funds

26%

$68,684

Stable value funds

8%

$21,188

     

Asset classes with most contributions in May

Percentage of contributions 

Index dollar value ($mil) 

Target date funds

47%

$539

Large U.S. equity funds

21%

$241

International equity funds

7%

$86

 

Returns for common indices

May

2021 YTD

Bloomberg Barclays U.S. Aggregate Index

0.33%

-2.29%

S&P 500 Index

0.70%

12.62%

Russell 2000 Index

0.21%

15.30%

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

3.13%

9.87%

 


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.

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.

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

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