September was a light month for 401(k) trading, according to the Alight Solutions 401(k) IndexTM. There were zero above-normal1 trading days in September, and when trades occurred, they generally went from equity to fixed income funds.
September observations:
- On average, 0.018% of 401(k) balances were traded daily
- 19 of 21 days favored fixed income funds
Alight Solutions 401(k) Index statistics for September 2020:
| Index statistics | September | 2020 YTD |
|---|---|---|
| Total transfers as percentage of starting balance | 0.27% | 2.85% |
| # Fixed days | 19 (90%) | 140 (74%) |
| # Equity days | 2 (10%) | 49 (26%) |
| # Above-normal days | 0 | 37 |
Inflows and outflows during September:
- Trading inflows mainly went to bond, stable value and money market funds
- Outflows were primarily from large U.S. equity, mid U.S. equity and target date2 funds
Asset classes with most trading inflows in September
| Percentage of inflows | Index dollar value ($ mil) | |
|---|---|---|
| Bond funds | 51% | $324 |
| Stable value funds | 37% | $232 |
| Money market funds | 9% | $56 |
Asset classes with most trading outflows in September
| Percentage of outflows | Index dollar value ($ mil) | |
|---|---|---|
| Large U.S. equity funds | 41% | $258 |
| Mid U.S. equity funds | 15% | $93 |
| Target date funds | 14% | $86 |
September investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities decreased from 66.6% in August to 66.1% in September
- New contributions to equities remained at 67.2% from August through September
Asset classes with largest percentage of total balance at end of September
| Percentage of balance | Index dollar value ($ mil) | |
|---|---|---|
| Target date funds | 29% | $65,268 |
| Large U.S. equity funds | 25% | $57,208 |
| Stable value funds | 10% | $22,538 |
Asset classes with most contributions in September
| Percentage of contributions | Index dollar value ($ mil) | |
|---|---|---|
| Target date funds | 47% | $514 |
| Large U.S. equity funds | 20% | $219 |
| International equity funds | 7% | $77 |
September market observations:
Markets were down in September with large U.S. equities (represented by the S&P 500 Index) falling -3.8%, small U.S. equities (represented by the Russell 2000 Index) sliding -3.3%, international equities (represented by the MSCI All Country World ex-U.S. Index) losing -2.5% and U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) falling -0.1%.
Returns for common indices
| September | 2020 YTD | |
|---|---|---|
| Bloomberg Barclays U.S. Aggregate Index | -0.1% | 6.8% |
| S&P 500 Index | -3.8% | 5.6% |
| Russell 2000 Index | -3.3% | -8.7% |
| MSCI All Country World ex-U.S. Index (net) | -2.5% | -5.4% |
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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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 two times the average daily net activity of the preceding 12 months.
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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.
