401(k) plan investors were light traders in July, according to the Alight 401(k) IndexTM. There were no above-normal1 trading days as Wall Street posted its best month since November 2020. Stable value funds topped inflows (59%), while most outflows (54%) were from target date funds2.
July observations:
- On average, 0.008% of 401(k) balances were traded daily.
- 13 of 20 days favored fixed income funds.
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The Alight Solutions 401(k) IndexTM statistics for the month of July: |
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Index statistics |
July |
2022 YTD |
|
Total transfers as percentage of starting balance |
0.09% |
0.89% |
|
# Fixed days |
13 (65%) |
106 (74%) |
|
# Equity days |
7 (35%) |
38 (26%) |
|
# Above-normal1 days |
0 |
33 |
Inflows and outflows during the month of July:
- Trading inflows mainly went to stable value, money market and large U.S. equity funds.
- Outflows were primarily from target date2, bond and company stock funds.
|
Asset classes with most trading inflows in July |
Percentage of inflows |
Index dollar value ($ mil) |
|
Stable value funds |
59% |
$114 |
|
Money market funds |
16% |
$30 |
|
Large U.S. equity funds |
10% |
$20 |
|
Asset classes with most trading outflows in July |
Percentage of outflows |
Index dollar value ($ mil) |
|
Target date funds2 |
54% |
$105 |
|
Bond funds |
22% |
$43 |
|
Company stock |
8% |
$16 |
July investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities increased from 67.7% in June to 68.6% in July.
- New contributions to equities decreased from 68.7% in June to 68.5% in July.
|
Asset classes with largest percentage |
Percentage of balance |
Index dollar value ($mil) |
|
Target date funds2 |
30% |
$69,153 |
|
Large U.S. equity funds |
26% |
$61,267 |
|
Stable value funds |
9% |
$21,601 |
|
Asset classes with most contributions in July |
Percentage of contributions |
Index dollar value ($ mil) |
|
Target date funds2 |
50% |
$709 |
|
Large U.S. equity funds |
20% |
$287 |
|
International equity funds |
7% |
$95 |
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Returns for common indices |
July |
2022 YTD |
|
Bloomberg Barclays U.S. Aggregate Index |
2.4% |
-8.2 % |
|
S&P 500 Index |
9.2 % |
-12.6 % |
|
Russell 2000 Index |
10.4 % |
-15.4 % |
|
MSCI All Country World ex-U.S. Index (net) |
3.4% |
-15.3 % |
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.
