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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. Net trades for the quarter amounted to 0.16% of balances, the lowest quarterly figure in the almost 25-year history of the 401(k) Index. There was only one day of above-normal1 activity. 
        
Q2 2021 observations:        

  • Total transfers as a percent of balances in Q2 2021 were 0.16%. The previous quarterly low was 0.30% (Q2 1998). From Q1 1998 through Q1 2021, the average quarterly net trading activity was 0.88%.   
  • 37 days (59%) had net trading dollars moving to equities, and 26 days (41%) favored fixed income. 

 

The Alight Solutions 401(k) Index statistics for Q2 2021 and year to date:

Index statistics

Q2 2021

2021 YTD

Total transfers as percentage of starting balance

0.16%

0.59%

# Fixed days

26 (41%)

44 (35%)

# Equity days

37 (59%)

80 (65%)

# Above-normal days

1

2

 

Asset classes with most trading inflows in Q2 2021

 

Percentage of inflows

 

Index dollar value ($mil)

International

36%

$153

Specialty/sector

18%

$75

Target date funds2

18%

$75

 

Asset classes with most trading outflows in Q2 2021

 

Percentage of outflows

 

Index dollar value ($mil)

Stable value

36%

$151

Company stock

35%

$146

Money market

11%

$46

 

Q2 2021 market returns:

Returns for common indices

Q2 2021

2021 YTD

Bloomberg Barclays U.S. Aggregate Index

1.83%

-1.60%

S&P 500 Index

8.55%

15.25%

Russell 2000 Index

4.29%

17.54%

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

5.48%

9.16%


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™.  Learn more about the Alight Solutions 401(k) Index™ here.

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

June was the second consecutive month of record low 401(k) trading activity, according to the Alight Solutions 401(k) Index. Net trading activity in June was 0.06% of balances, down from 0.09% in May.

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