401(k) Investors Had an Active Trading Month in June

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.