401(k) investors bucked the adage to "sell in May and stay away," according to the Alight Solutions 401(k) Index. On average, net daily trading was 0.011% of 401(k) balances—the lowest monthly value in the more than 20-year history of the 401(k) Index.
May observations:
- There was one day of above-normal1 activity—the first since January.
- Monthly net trading activity was 0.09% of balances, the lowest level on record and less than half the monthly average for the trailing five-year period (0.22%).
- 12 days favored fixed income (60% of days in May).
|
Index statistics |
May |
2021 YTD |
|
Total transfers as percentage of starting balance |
0.09% |
0.56% |
|
# Fixed days |
12 (60%) |
34 (33%) |
|
# Equity days |
8 (40%) |
68 (67%) |
|
# Above-normal days |
1 |
2 |
Inflows and outflows during the month of May:
- Trading inflows mainly went to stable value, international, and specialty funds.
- Outflows were primarily from company stock, as well as large and small U.S. equity funds.
|
Asset classes with most trading inflows in May |
Percentage of inflows |
Index dollar value ($mil) |
|
Stable value |
53% |
$129 |
|
International |
17% |
$42 |
|
Specialty/Sector |
9% |
$22 |
|
Asset classes with most trading outflows in May |
Percentage of outflows |
Index dollar value ($mil) |
|
Company stock |
44% |
$106 |
|
Large U.S. equity |
28% |
$67 |
|
Small U.S. equity |
13% |
$31 |
May investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities increased from 69.8% in April to 69.9% in May.
- New contributions to equities increased from 68.9% in April to 69.2% in May.
|
Asset classes with largest percentage of total balance at the end of May |
Percentage of balance |
Index dollar value ($mil) |
|
Target date funds2 |
30% |
$79,672 |
|
Large U.S. equity funds |
26% |
$68,684 |
|
Stable value funds |
8% |
$21,188 |
|
Asset classes with most contributions in May |
Percentage of contributions |
Index dollar value ($mil) |
|
Target date funds |
47% |
$539 |
|
Large U.S. equity funds |
21% |
$241 |
|
International equity funds |
7% |
$86 |
|
Returns for common indices |
May |
2021 YTD |
|
Bloomberg Barclays U.S. Aggregate Index |
0.33% |
-2.29% |
|
S&P 500 Index |
0.70% |
12.62% |
|
Russell 2000 Index |
0.21% |
15.30% |
|
MSCI All Country World ex-U.S. Index (net) |
3.13% |
9.87% |
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.
Members of the media: please contact Landis Cullen for questions about the Alight Solutions 401(k) Index™.
