Following April’s record low, May trading was up slightly, according to the Alight Solutions 401(k) IndexTM. With no above-normal1 days, 0.009% of balances were traded daily on average in May. Money market (39%) and bond funds (28%) had the highest inflows, while target date2 (48%) and large U.S. equity funds (28%) had the highest outflows. New contributions to equities increased from 68.4% to 68.6%.
May observations:
- On average, 0.009% of 401(k) balances were traded daily.
- 16 of 22 days favored fixed income funds.
The Alight Solutions 401(k) IndexTM statistics for the month of May: | ||
Index statistics | May | 2023 YTD |
Total transfers as percentage of starting balance | 0.08% | 0.33% |
# Fixed days | 16 (73%) | 72 (70%) |
# Equity days | 6 (27%) | 31 (30%) |
# Above-normal1 days | 0 | 2 |
Inflows and outflows during the month of May:
- Trading inflows mainly went to money market, bond and stable value funds.
- Outflows were primarily from target date2, large U.S. equity and small U.S. equity funds.
Asset classes with most trading inflows in May | Percentage of inflows | Index dollar value ($mil) |
Money market funds | 39% | $74 |
Bond funds | 28% | $54 |
| Stable value funds | 3% | $43 |
Asset classes with most trading outflows in May | Percentage of outflows | Index dollar value ($mil) |
Target date funds2 | 48% | $91 |
Large U.S. equity funds | 28% | $53 |
| Small U.S. equity funds | 7% | $14 |
May investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities remained at 68.8% from April to May.
- New contributions to equities increased from 68.4% in April to 68.6% in May.
Asset classes with largest percentage of total balance at the end of May | Percentage of balance | Index dollar value ($mil) |
Target date funds2 | 31% | $68,693 |
Large U.S. equity funds | 27% | $60,098 |
Stable value funds | 9% | $19,630 |
Asset classes with most contributions in May | Percentage of contributions | Index dollar value($mil) |
Target date funds2 | 50% | $592 |
Large U.S. equity funds | 20% | $243 |
International equity funds | 7% | $ |
May market observations:
Returns for common indices | May | 2023 YTD |
Bloomberg Barclays U.S. Aggregate Index | -1.09% | 2.46% |
S&P 500 Index | 0.43% | 9.65% |
Russell 2000 Index | -0.92% | -0.04% |
MSCI All Country World ex-U.S. Index (net) | -3.64% | 4.77% |
[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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