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Alight Solutions 401(k) Index™: May 2024 Observations

Trading activity was down slightly in May with just three above-normal1 days compared to four in April, according to the Alight Solutions 401(k) IndexTM. Investors favored fixed income funds on 15 of 22 days. Large U.S. equity (38%) and bond (26%) funds saw the most inflows, while target date funds2 (41%) experienced the most outflows. New contributions to equities stayed steady at 69.8% in May, while average asset allocation in equities increased from 71.3% in April to 71.7% in May.

May observations:        

•    On average, 0.008% of 401(k) balances were traded daily.

•    15 of 22 days favored fixed income funds.



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

Index statistics

May

2024 YTD

Total transfers as percentage of starting balance

0.1%

0.65%

# Fixed days

15 (68%)

61 (58%)

# Equity days

7 (32%)

44 (42%)

# Above-normal1 days

3

21


Inflows and outflows during the month of May:

•    Trading inflows mainly went to large U.S. equity, bond and money market funds.

•    Outflows were primarily from target date2, company stock and emerging markets funds.


Asset classes with most trading 

inflows in May

Percentage of inflows

Index dollar value ($mil)

Large U.S. equity funds

38%

$101

Bond funds

26%

$70

Money Market funds

13%

$36

Asset classes with most trading 

outflows in May

Percentage of outflows

Index dollar value ($mil)

Target date funds2 

41%

$110

Company Stock

30%

$80

Emerging market funds

13%

$35


May investment portfolios:

  • After reflecting market movements and trading activity, average asset allocation in equities increased from 71.3% in April to 71.7% in May.
  • New contributions to equities remained at 69.8% from April through May.

Asset classes with largest percentage

of total balance at the end of May

  Percentage of balance

  Index dollar value ($mil)  

Target date funds2

32%

$84,892

Large U.S. equity funds

28%

$75,537

Company stock funds

7%

$19,491

Asset classes with most 

contributions in May

Percentage of contributions

Index dollar value($mil)

Target date funds2

51%

$740

Large U.S. equity funds

21%

$310

International equity funds

7%

$99


Returns for common indices

May

2024 YTD

Bloomberg Barclays U.S. Aggregate Bond Index

1.70%

-1.64%

S&P 500 Index

4.96%

11.30%

Russell 2000 Index

5.02%

2.68%

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

2.90%

5.79%

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.

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™: April 2024 Observations

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Alight’s 2024 Universe Benchmarks report provides a comprehensive look at the savings and investment behaviors of participants in defined contribution (DC) plans.

Alight Solutions 401(k) Index™: First Quarter 2024 Observations

401(k) investors were active in Q1, logging 14 above-normal1 days, according to the Alight Solutions 401(k) Index™. The distribution of those days reveals a slowing trend, however, with eight taking place in January, followed by four in February and just two in March.