July was a particularly slow month for trading in 401(k) plans, with no days of above-normal trading activity, according to the Alight Solutions 401(k) Index. This was the first month of no days of above-normal trading activity since June 2017 and continues the lull in trading, with only one day of above-normal trading in both May and June.
Thirteen of 21 days favored fixed income, and, on average, 0.014% of balances were traded each day. Throughout the entire month, participants transferred a total of 0.15% of their balances. Year-to-date, they have transferred a total of 0.80% of their balances.
The number of days when participants transferred money into fixed income funds in July totaled 13, or 62% of the trades. Year-to-date, they have transferred money into fixed income funds on 80 days, representing 55% of the trades. The number of days when participants transferred money into equity funds totaled eight, or 38% of the trades. Year-to-date, they have transferred money into equity funds 66 days, representing 45% of the trades.
Inflows went primarily into stable value (53%), mid U.S. equity (22%) and money market funds (15%), with money coming out of company stock (27%), target-date funds (26%) and emerging markets funds (14%).At the end of July, participants had an average of 68.9% of their portfolios invested in equities, up slightly from 68.5% in June. New contributions in July matched those in June, with 68.1% invested in equities.
The three top asset classes with the largest percentage of total balances were target-date funds (28%), large U.S. equity funds (25%) and stable value funds (10%). Asset classes with the most contributions in July were target-date funds (46%), large U.S. equity funds (20%) and international funds (8%).
Domestic and international equities had positive market returns in July, with both large U.S. equities and small U.S. equities up 1.7%. International equities were up 2.3% and U.S. bonds were virtually unchanged, with a 0.1% gain.