401(k) Investors Light on Trades in July

The movement from equities to fixed income continues, according to the Alight Solutions 401(k) Index.

401(k) investors hardly touched their accounts in July, with an average of a mere 0.021% of 401(k) balances traded daily, according to the Alight Solutions 401(k) Index.

Twenty out of 22 trading days favored fixed income funds, continuing the pattern observers have seen all this year, with 401(k) investors, year-to-date, favoring fixed income funds for a total of 102 days, and equities, 45 days.

During July, total transfers as a percentage of starting balance averaged 0.36% of 401(k) investors’ accounts. Year-to-date, that is 2.31%.

Alight notes that trading inflows mainly went to bond, stable value and money market funds during July, with outflows primarily from large U.S. equity, target-date and mid U.S. equity funds.

Asset classes with the most trading inflows in July were bond funds, taking in 53% of the inflows, valued at $419 million, followed by stable value funds (33%; $257 million) and money market funds (12%; $91 million).

Asset classes with the most trading outflows in July were large U.S. equity funds (43%; $338 million), target-date funds (TDFs) (23%; $184 million) and mid U.S. equity funds (12%; $91 million).

After reflecting market movements and trading activity, average asset allocation in equities increased ever so slightly from 65.6% in July to 65.9% in July. New contributions to equities remained steady at 67.5%.

Asset classes with the largest percentage of total balance at the end of July were TDFs (29%; $65.1 billion), large U.S. equity funds (25%; $56.9 billion) and stable value funds (10%; $22.8 billion).

Asset classes with the most contributions in July were TDFs (46%; $569 million), large U.S. equity funds (21%; $255 million) and international equity funds (7%; $87 million).

During the month, large U.S. equities were up 5.6%, international equities gained 4.5%, small U.S. equities were up 2.8% and U.S. bonds rose 1.5%.