For the first time in over two years, we saw back-to-back months with net inflows to equities in June and July, according to the Alight Solutions 401(k) IndexTM. Due to market returns and trading activity, the average equity allocation was above 70% for the first time in 18 months. July trading was light, with no above normal1 days.
July observations:
• On average, 0.009% of 401(k) balances were traded daily.
• 15 of 20 days favored equity funds.
The Alight Solutions 401(k) IndexTM statistics for the month of July: | ||
Index statistics | July | 2023 YTD |
Total transfers as percentage of starting balance | 0.11% | 0.44% |
# Fixed days | 5 (25%) | 83 (58%) |
# Equity days | 15 (75%) | 61 (42%) |
# Above-normal1 days | 0 | 4 |
Inflows and outflows during the month of July:
• Trading inflows mainly went to large U.S. equity, money market and target date funds.2
• Outflows were primarily from stable value, company stock and small U.S. equity funds.
Asset classes with most trading inflows in July | Percentage of inflows | Index dollar value ($mil) |
Large U.S. equity funds | 42% | $105 |
Money market funds | 22% | $56 |
| Target date funds2 | 13% | $32 |
Asset classes with most trading outflows in July | Percentage of outflows | Index dollar value ($mil) |
Stable value funds | 63% | $160 |
| Company stock | 29% | $73 |
| Small U.S. equity funds | 5% | $13 |
July investment portfolios:
- After reflecting market movements and trading activity, average asset allocation in equities increased from 69.7% in June to 70.2% in July.
- New contributions to equities increased from 68.6% in June to 68.7% in July.
Asset classes with largest percentage of total balance at the end of July | Percentage of balance | Index dollar value ($mil) |
Target date funds2 | 31% | $73,955 |
Large U.S. equity funds | 28% | $66,416 |
Stable value funds | 8% | $19,112 |
Asset classes with most contributions in July | Percentage of contributions | Index dollar value($mil) |
Target date funds2 | 51% | $708 |
Large U.S. equity funds | 21% | $284 |
International equity funds | 7% | $95 |
Returns for common indices | July | 2023 YTD |
Bloomberg Barclays U.S. Aggregate Index | -0.07% | 2.02% |
S&P 500 Index | 3.21% | 20.65% |
Russell 2000 Index | 6.12% | 14.70% |
MSCI All Country World ex-U.S. Index (net) | 4.07% | 13.92% |
[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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