June was another active trading month for 401(k) investors, according to the Alight 401(k) IndexTM. There were 5 above-normal1 trading days, and all but 3 days in the month had net trading flows going from equities to fixed income.
June observations:
- On average, 0.015% of 401(k) balances were traded daily.
- 18 of 21 days favored fixed income funds.
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The Alight Solutions 401(k) IndexTM statistics for the month of June: |
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Index statistics |
June |
2022 YTD |
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Total transfers as percentage of starting balance |
0.19% |
0.86% |
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# Fixed days |
18 (86%) |
93 (75%) |
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# Equity days |
3 (14%) |
31 (25%) |
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# Above-normal1 days |
5 |
33 |
Inflows and outflows during the month of June:
- Net trading inflows exclusively went to fixed income funds with stable value leading the way.
- Outflows were primarily from target date2, large U.S. equity and international equity funds.
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Asset classes with most trading inflows in June |
Percentage of inflows |
Index dollar value ($mil) |
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Stable value funds |
82% |
$368 |
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Money market funds |
14% |
$62 |
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Bond funds |
4% |
$16 |
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Asset classes with most trading outflows in June |
Percentage of outflows |
Index dollar value ($mil) |
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Target date funds2 |
53% |
$238 |
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Large U.S. equity funds |
19% |
$85 |
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International equity funds |
8% |
$37 |
June investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities decreased from 68.8% in May to 67.7% in June.
- New contributions to equities decreased from 69.0% in May to 68.7% in June.
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Asset classes with largest percentage of total balance at the end of June |
Percentage of balance |
Index dollar value ($mil) |
|
Target date funds2 |
30% |
$65,051 |
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Large U.S. equity funds |
26% |
$56,071 |
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Stable value funds |
10% |
$21,564 |
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Asset classes with most contributions in June |
Percentage of contributions |
Index dollar value ($mil) |
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Target date funds2 |
49% |
$574 |
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Large U.S. equity funds |
21% |
$245 |
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International equity funds |
7% |
$83 |
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Returns for common indices |
June |
2022 YTD |
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Bloomberg Barclays U.S. Aggregate Index |
-1.7% |
-10.4% |
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S&P 500 Index |
-8.3% |
-20.0% |
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Russell 2000 Index |
-8.2% |
-25.2% |
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MSCI All Country World ex-U.S. Index (net) |
-8.6% |
-19.4% |
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.
