401(k) investors were light traders in Q2, with just nine above-normal1 days, compared to 14 in Q1, according to the Alight Solutions 401(k) IndexTM. Net trading favored fixed income funds on 37 of 63 days. Bond (39%) and large cap U.S. equity (34%) funds had the most trading inflows, while target date funds2 (50%) and mid cap U.S. equity funds (16%) saw the most outflows. At the close of Q2, the average asset allocation in equities was 71.9%, the highest reported since January 2001.
Second quarter observations:
• Net transfers for the quarter were 0.26% of balances.
• 37 out of 63 trading days in the second quarter had net trading dollars moving from equities to fixed income.
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Asset classes with most trading inflows in Q2 2024 | Percentage of inflows | Index dollar value ($mil) |
Bond funds | 39% | $280 |
Large U.S. equity funds | 34% | $242 |
| Money market funds | 16% | $115 |
Asset classes with most trading outflows in Q2 2024 | Percentage of outflows | Index dollar value ($mil) | |
Target date funds2 | 50% | $357 | |
| 16% | $111 | |
| Emerging markets funds | 11% | $79 |
Returns for common indices | Q2 2024 | 2024 YTD |
Bloomberg Barclays Capital U.S. Aggregate Bond Index | 0.07% | -0.71% |
S&P 500 Index | 4.28% | 15.29% |
Russell 2000 Index | -3.28% | 1.73% |
MSCI All Country World ex-U.S. Index (net) | 0.96% | 5.69% |
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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