Alight Solutions has published the June update of its 401(k) Index, noting that it was another active trading month for investors.
There were five above-normal trading days in June, Alight says. All but three days in the month had net trading flows going from equities to fixed income.
On average, 0.015% of 401(k) balances were traded daily, compared to an average of 0.018% last month. Investors favored moving assets into fixed-income funds during 18 out of 21 trading days. Trading inflows exclusively went to fixed-income funds with stable value leading the way, while outflows were primarily from target-date, large U.S. and international equity funds, Alight says.
After reflecting market movements and trading activity, average asset allocation in equities decreased from 68.8% in May to 67.7% in June, Alight says. New contributions to equities decreased from 69% in May to 68.7% in June.
According to the index, 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 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 two times the average daily net activity of the preceding 12 months.
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