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Alight Solutions 401(k) Index™: July 2022 Observations

401(k) plan investors were light traders in July, according to the Alight 401(k) IndexTM.  There were no above-normal1 trading days as Wall Street posted its best month since November 2020.  Stable value funds topped inflows (59%), while most outflows (54%) were from target date funds2.


July observations:

  • On average, 0.008% of 401(k) balances were traded daily.
  • 13 of 20 days favored fixed income funds.

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

Index statistics

July

2022 YTD

Total transfers as percentage of starting balance

0.09%

0.89%

# Fixed days

13 (65%)

106 (74%)

# Equity days

7 (35%)

38 (26%)

# Above-normal1 days

0

33


Inflows and outflows during the month of July:

  • Trading inflows mainly went to stable value, money market and large U.S. equity funds.
  • Outflows were primarily from target date2, bond and company stock funds.

Asset classes with most trading inflows in July 

Percentage of inflows

Index dollar value ($ mil)

Stable value funds

59%

$114

Money market funds

16%

$30

Large U.S. equity funds

10%

$20

Asset classes with most trading outflows in July

Percentage of outflows

Index dollar value ($ mil)

Target date funds2

54%

$105

Bond funds

22%

$43

Company stock

8%

$16


July investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased from 67.7% in June to 68.6% in July.
  • New contributions to equities decreased from 68.7% in June to 68.5% in July.

Asset classes with largest percentage
of total balance at the end of July

Percentage of balance

Index dollar value ($mil)

Target date funds2

30%

$69,153

Large U.S. equity funds

26%

$61,267

Stable value funds

9%

$21,601

Asset classes with most contributions in July

Percentage of contributions

Index dollar value ($ mil)

Target date funds2

50%

$709

Large U.S. equity funds

20%

$287

International equity funds

7%

$95


Returns for common indices

July

2022 YTD

Bloomberg Barclays U.S. Aggregate Index

2.4%

-8.2 %

S&P 500 Index

9.2 %

-12.6 %

Russell 2000 Index

10.4 %

-15.4 %

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

3.4%

-15.3 %

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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