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Alight Solutions 401(k) Index™: August 2023 Observations

In August, 401(k) investors preferred fixed income investments, with money market and bond funds receiving 74% of net trading dollars, according to the Alight Solutions 401(k). Index™. Nearly every day (19 of 23) saw net trades favoring fixed income funds. The average asset allocation in equities dipped by 20 basis points to 70.0%, while new contributions to equities remained at 68.7%.

August observations:

  • On average, 0.01% of 401(k) balances were traded daily.
  • 19 of 23 days favored fixed income funds.



The Alight Solutions 401(k) IndexTM statistics for the month of August:

Index statistics

August

2023 YTD

Total transfers as percentage of starting balance

0.08%

0.52%

# Fixed days

19 (82%)

102 (61%)

# Equity days

4 (17%)

65 (39%)

# Above-normal1 days

3

7


Inflows and outflows during the month of August:

  • Trading inflows mainly went to money market, bond and international equity funds.
  • Outflows were primarily from company stock, mid U.S. equity and target date funds.2 

Asset classes with most trading 

inflows in August

Percentage of inflows

Index dollar value ($mil)

Money market funds

38%

$76

Bond funds

36%

$71

International equity funds

13%

$26

Asset classes with most trading 

outflows in August

Percentage of outflows

Index dollar value ($mil)

Company stock

65%

$130

Mid U.S. equity funds

18%

$37

Target date funds2 

8%

$16


August investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities decreased from 70.2% in July to 70.0% in August.
  • New contributions to equities remained at 68.7% from July through August.

Asset classes with largest percentage

of total balance at the end of August

  Percentage of balance

  Index dollar value ($mil)  

Target date funds2

31%

$72,404

Large U.S. equity funds

28%

$65,150

Stable value funds

8%

$18,994

Asset classes with most 

contributions in August

Percentage of contributions

Index dollar value($mil)

Target date funds2

50%

$612

Large U.S. equity funds

21%

$251

International equity funds

7%

$86


Returns for common indices

February

2023 YTD

Bloomberg Barclays U.S. Aggregate Index

-0.64%

1.37%

S&P 500 Index

-1.59%

18.73%

Russell 2000 Index

-5.00%

8.96%

MSCI All Country World ex-U.S. Index (net)

-4.52

8.78%

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.

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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