Alight Solutions 401(k) Index™: August 2026 observations

All four market benchmarks advanced in August, but participant trading was exceptionally limited. Average daily net activity was 0.008% of balances, the lowest August reading across 30 years of available data, while total transfers represented only 0.08% of starting balances, according to the Alight 401(k) Index.

Trading direction favored fixed income on 14 of 21 days, close to the long-run August norm. Bond, stable value and money market funds received 83% of trading inflows, while large U.S. equity, target date funds² and company stock represented 80% of outflows. Meanwhile, recurring contributions remained concentrated in target date² and equity funds.

August observations:

• On average, 0.008% of 401(k) balances were traded daily.
• Trading leaned toward fixed income, which was favored on 67% of trading days versus 33% for equities.
• Both above-normal¹ trading days were classified as moderate, with no high-activity days recorded.

Inflows and outflows during the month of August:

• Net trading inflows were led by bond funds (49%), stable value (22%) and money market funds (12%).
• Outflows were concentrated in large U.S. equity (37%), target date funds² (24%) and company stock (19%).

August investment portfolios:

• Participant portfolios remained anchored in target date² and large U.S. equity funds, which represented 31% and 29% of balances, respectively — 60% of total Index balances at month-end.
• August contributions followed a similar pattern: 51% ($541 million) went to target date funds² and 23% ($242 million) to large U.S. equity funds, accounting for 74% of contributions combined, followed by international equity funds at 7% ($76 million).
• Against a backdrop of positive returns across U.S. equity, international equity and fixed income benchmarks, contributions remained concentrated in target date² and equity oriented investments.

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 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.