401(k) Trades Took Some Time Off in July

Participants took a vacation from 401(k) transfers in July, with no above-normal trading days – the first time that’s happened in more than a year.

Not that it hasn’t been heading in that direction; May and June each saw only one day of above-normal trading. Still, July was the first month since June 2017 with zero days of above-normal trading activity in the Alight Solutions 401(k) Index.

Alight defines 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 Alight Solutions 401(k) 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.

Moreover, on average, just 0.014% of balances were traded daily. As for where the transfers were directed:

53% – stable value ($160 million)
22% – mid U.S. equity funds
15% – money market funds

Those funds were drawn from company stock (27%), target-date funds (26%) and emerging market funds (14%).

New contributions were directed to:

28% – target-date funds ($57.5 million)
25% – large U.S. equity funds ($51.8 million)
10% – stable value ($20.5 million