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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.

Related Insights


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

In August, 401(k) investors preferred fixed income investments, with money market and bond funds receiving 74% of net trading dollars, according to the Alight Solutions 401(k) Index™.

Alight Solutions 401(k) Index™

Monthly and quarterly Alight Solutions 401(k) Index Reports

Alight Solutions 401(k) Index™: Q2 2023 Observations

401(k) investors exhibited see-sawing trading activity in the second quarter of 2023, according to the Alight Solutions 401(k) IndexTM. April and May saw trading activity favoring fixed income, but June saw investors moving money back to equities.