401(k) investors were active traders in early August when Wall Street had its worst day in nearly two years. Activity slowed significantly afterward with just three above-normal1 days, according to the Alight Solutions 401(k) IndexTM. Investors favored fixed income funds on 20 of 22 days in August. Stable value (43%) and bond (36%) funds saw the most inflows, while company stock (27%), large U.S. equity (25%) and target date funds2 (16%) experienced the most outflows. New contributions to equities decreased from 69.7% in July to 69.5% in August, while average asset allocation in equities hit yet another new 23-year high, rising from 72.1% in July to 72.9% in August.
August observations:
• On average, 0.012% of 401(k) balances were traded daily.
• 20 of 22 days favored fixed income funds.
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Inflows and outflows during the month of August:
• Trading inflows mainly went to stable value, bond and money market funds. • Outflows were primarily from company stock, large U.S. equity and target date funds2. |
Asset classes with most trading inflows in August | Percentage of inflows | Index dollar value ($mil) |
| Stable value funds | 43% | $217 |
Bond funds | 36% | $183 |
| Money market funds | 19% | $98 |
Asset classes with most trading outflows in August | Percentage of outflows | Index dollar value ($mil) |
Company stock | 27% | $134 |
Large U.S. equity funds | 25% | $128 |
| Target date funds2 | 16% | $78 |
August investment portfolios:
• After reflecting market movements and trading activity, average asset allocation in equities increased from 72.1% in July to 72.9% in August.
• New contributions to equities decreased from 69.7% in July to 69.5% in August.
Asset classes with largest percentage of total balance at the end of August | Percentage of balance | Index dollar value ($mil) |
Large U.S. equity funds | 30% | $85,265 |
Target date funds2 | 30% | $83,584 |
Company stock funds | 7% | $20,737 |
Asset classes with most contributions in August | Percentage of contributions | Index dollar value($mil) |
Target date funds2 | 52% | $726 |
Large U.S. equity funds | 21% | $294 |
International equity funds | 7% | $92 |
Returns for common indices | August | 2024 YTD |
Bloomberg Barclays U.S. Aggregate Bond Index | 1.44% | 3.07% |
S&P 500 Index | 2.43% | 19.53% |
Russell 2000 Index | -1.49% | 10.39% |
MSCI All Country World ex-U.S. Index (net) | 2.85% | 11.22% |
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.
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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