Nearly 90% of the days in the quarter saw net trading activity favor fixed income, according to the Alight Solutions 401(k) Index.
High trading activity days were concentrated around the beginning and end of the year—with trades moving in similar volumes in opposite directions.
The top economists at J.P. Morgan Asset Management and Vanguard remind investors that volatility is normal, and that long-term thinking is a solution to short-term stress about equity prices.
Higher short-term rates translate into additional income for investors from their bond portfolios, and their fixed-income allocation should provide greater ballast for the more volatile equity component of their portfolios, says Joseph Davis, with Vanguard.
Northern Trust expects relatively steady economic growth, controlled inflation and accommodative monetary policy.
Sixty-four percent of participants in their 20s own a TDF.
Despite something of a tepid second quarter, pension plans have enjoyed a strong year of growth.
The chief investment officer at Winthrop Capital Management discusses the uptick in short term interest rates and new opportunities within the one-year to five-year part of the curve.
According to the Alight Solutions 401(k) Index, year-to-date there have been 29 days with above-normal trading activity, suggesting that the month of June brought back a bit of a sense of tranquility for investors after a difficult start to the year.
HSAs need to offer equities, multi-asset classes and fixed income, Devenir says.
Outflows were primarily from target-date (35%), emerging markets (27%) and company stock (27%) funds, the Alight Solutions 401(k) Index shows.
In light of the market volatility, they fled from equities
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In a new analysis, J.P. Morgan Asset Management describes how equities have not generally come under pressure until the U.S. two-year Treasury rate reaches above 3.5%.
However, at year-end 2015, for example, the ICI says participants in their twenties had 80% of their portfolios invested in equities, while participants in their sixties had 55% in equities.
Alight Solutions says there was a 50/50 split of trading days favoring equities and those favoring fixed income.
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The majority of outflows from retirement plan participant accounts came from U.S. equities and company stock, despite powerful stock market returns for the year thus far.