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

July market performance was mixed, with international equities advancing, fixed income declining as yields rose and U.S. equities producing uneven results across market segments. Despite that backdrop, participant behavior remained steady and long-term focused, according to the Alight 401(k) Index.

Retirement plan trading activity was muted, with transfers totaling just 0.07% of starting balances for the month. On a dollar-weighted basis, net trading flows favored fixed income. Overall, activity remained well below historical norms, suggesting participants had limited reaction to short-term market volatility.

Participant saving and investment behavior also remained consistent. Target date funds² and large U.S. equity funds continued to account for the largest share of assets at 31% and 29%, respectively, altogether attracting 74% of new contributions. The data suggests participants continued to rely on long-term retirement strategies despite uneven July market performance.

July observations:

• On average, 0.009% of 401(k) balances were traded daily.
• Fixed income and equity trading days were evenly split, with each favored on 50% of trading days in July.

Inflows and outflows during the month of July:

• Net trading inflows were concentrated in bond funds, followed by specialty/sector funds and emerging markets.
• Large U.S. equity, target date funds² and stable value funds experienced the largest net trading outflows, accounting for 40%, 39% and 14% of total outflows, respectively.

July investment portfolios:

• Short-term market performance had little impact on overall portfolio positioning, as target date funds² and large U.S. equity funds continued to dominate participant assets, representing a combined 60% of total Index balances at month-end.
• Target date funds² received the largest share of July contributions at 51% ($659 million), while large U.S. equity funds received 23% ($296 million). Together, these two asset classes accounted for nearly three-quarters of all participant contributions during the month. 
• Despite negative returns across most U.S. equity and fixed income benchmarks in July, participants continued directing contributions primarily to target date funds² 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 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.