Dog days of summer or something more?
Alight Solutions is out with its research on retirement plan trading activity, and marking the second consecutive month, August had no days of above-normal trading activity.
The Alight Solutions 401(k) Index further finds that July and August are the first back-to-back months with no above-normal days since May and June 2017.
In August, 15 of 23 days favored fixed-income funds and, on average, 0.013 percent of 401k balances were traded daily.
As far as inflows and outflows during the month, trading inflows mainly went to stable value, mid-U.S. equity, and large U.S. equity funds
Outflows were primarily from target date, company stock, and emerging markets funds.
Asset allocation in equities increased to 69.2 percent at the end of August from 68.9 percent at the end of July, and 68.1 percent of new contributions were invested in equities, the same percentage as July.
Domestic equities delivered positive returns for the month, with large U.S. equities up 3.3 percent and small U.S. equities up 4.3 percent.
U.S. bonds gained 0.6 percent. International equities lost 2.1 percent during the month.
A “normal” level of relative transfer activity is when the net daily movement of participants’ balances as a percent of total 401k balances within the Alight Solutions 401k 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.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
