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.
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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.
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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