401(k) Investors Continue to Move Into Fixed Income

There was a slight uptick in trading among 401(k) investors in June, according to the Alight Solutions 401(k) Index. These investors traded 0.26% of their balances, up from 0.11% in May and 0.13% in April. There were three days of above-normal activity.

On average, 0.023% of balances were traded daily. Seventeen of 22 trading days favored fixed income.

The asset class with the most trading inflows in June was bond funds, taking in 62% of the flows, valued at $335 million. That was followed by stable value funds (26%; $139 million) and money market funds (10%; $55 million).

Asset classes with the most trading outflows in June were large U.S. equity funds (45%; $245 million), target-date funds (TDFs) (24%; $129 million) and company stock (13%; $69 million).

Due to trading activity and market movements, the average asset allocation in equities increased from 65.4% in May to 65.6% in June. New contributions to equities ticked upward from 67.2% in May to 67.5% in June.

Asset classes with the largest percentage of total balance at the end of June were TDFs (29%; $62.8 billion), large U.S. equity funds (25%; $54.5 billion) and stable value funds (10%; $22.7 billion).

Asset classes with the most contributions in June were TDFs (46%; $483 million), large U.S. equity funds (21%; $219 million) and international equity funds (7%; $76 million).

During the month of June, international equities rose by 4.5%, followed by small U.S. equities (3.5%), large U.S. equities (2.0%) and U.S. bonds (0.6%).