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

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

Following April’s record low, May trading was up slightly, according to the Alight Solutions 401(k) IndexTM.  With no above-normal1 days, 0.009% of balances were traded daily on average in May. Money market (39%) and bond funds (28%) had the highest inflows, while target date2 (48%) and large U.S. equity funds (28%) had the highest outflows. New contributions to equities increased from 68.4% to 68.6%. 

May observations:

  • On average, 0.009% of 401(k) balances were traded daily.
  • 16 of 22 days favored fixed income funds.

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

Index statistics

May

2023 YTD

Total transfers as percentage of starting balance

0.08%

0.33%

# Fixed days

16 (73%)

72 (70%)

# Equity days

6 (27%)

31 (30%)

# Above-normal1 days

0

2


Inflows and outflows during the month of May:

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

Asset classes with most trading 

inflows in May

Percentage of inflows

Index dollar value ($mil)

Money market funds

39%

$74

Bond funds

28%

$54

Stable value funds

3%

$43

Asset classes with most trading 

outflows in May

Percentage of outflows

Index dollar value ($mil)

Target date funds2

48%

$91

Large U.S. equity funds

28%

$53

Small U.S. equity funds

7%

$14


May investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities remained at 68.8% from April to May.
  • New contributions to equities increased from 68.4% in April to 68.6% in May.

Asset classes with largest percentage 

of total balance at the end of May

  Percentage of balance

  Index dollar value ($mil)  

Target date funds2

31%

$68,693

Large U.S. equity funds

27%

$60,098

Stable value funds

9%

$19,630

Asset classes with most 

contributions in May

Percentage of contributions

Index dollar value($mil)

Target date funds2

50%

$592

Large U.S. equity funds

20%

$243

International equity funds

7%

$


May market observations:

Returns for common indices

May

2023 YTD

Bloomberg Barclays U.S. Aggregate Index

-1.09%

2.46%

S&P 500 Index

0.43%

9.65%

Russell 2000 Index

-0.92%

-0.04%

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

-3.64%

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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