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Alight Solutions 401(k) Index™: June 2023 Observations

Alight Solutions 401(k) Index™: June 2023 Observations

A rising stock market in June saw investors trading into equities, according to the Alight Solutions 401(k) IndexTM. Large U.S. equity funds accounted for the most inflows (71%), while stable value funds experienced the most outflows (57%). New contributions to equities stayed the same at 68.6%. The two above-normal1 days were the first since March.
        
June observations:        
•    On average, 0.011% of 401(k) balances were traded daily.
•    15 of 21 days favored equity funds.


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

Index statistics

June

2023 YTD

Total transfers as percentage of starting balance

0.12%

0.35%

# Fixed days

6 (29%)

78 (63%)

# Equity days

15 (71%)

46 (37%)

# Above-normal1 days

2

4


Inflows and outflows during the month of June:

•    Trading inflows mainly went to large U.S. equity, bond and international equity funds.
•    Outflows were primarily from stable value, company stock and small U.S. equity funds.

Asset classes with most trading 

inflows in June

Percentage of inflows

Index dollar value ($mil)

Large U.S. equity funds

71%

$197

Bond funds

17%

$46

International equity funds

7%

$19

Asset classes with most trading 

outflows in June

Percentage of outflows

Index dollar value ($mil)

Stable value funds

57%

$156

Company stock

31%

$85

Small U.S. equity funds

6%

$16


June investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased from 68.8% in May to 69.7% in June.
  • New contributions to equities remained at 68.6% from May through June.

Asset classes with largest percentage 

of total balance at the end of June

  Percentage of balance

  Index dollar value ($mil)  

Target date funds2

31%

$71,801

Large U.S. equity funds

27%

$64,165

Stable value funds

8%

$19,380

Asset classes with most 

contributions in June

Percentage of contributions

Index dollar value($mil)

Target date funds2

50%

$682

Large U.S. equity funds

21%

$282

International equity funds

7%

$98


Returns for common indices

June

2023 YTD

Bloomberg Barclays U.S. Aggregate Index

-0.36%

2.46%

S&P 500 Index

6.61%

9.65%

Russell 2000 Index

8.13%

-0.04%

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

4.49%

4.77%

[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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