May was the lightest month of trading activity among 401(k) investors in 2020, according to the Alight Solutions 401(k) Index. On average, a mere 0.018% of balances were traded daily, down from 0.023% in April and 0.078% in March. Throughout the month of May, 401(k) participants traded 0.11% of their balances. Year-to-date, they have traded 1.72%. There were no above-normal trading days.
401(k) investors continued to favor fixed income, with those trades dominating 13, or 65% of the total trading days in the month, and equities leading for seven days, or 35%.
Asset classes with the most trading inflows in May were bond funds, taking in 31% of the inflows, valued at $73 million, followed by international equity funds (23%; $53 million) and money market funds (19%; $44 million).
Asset classes with the most trading outflows in May were target-date funds (TDFs) (48%; $113 million) and large U.S. equity funds (28%; $65 million).
Asset classes with the largest percentage of total balances at the end of May were TDFs (29%; $61.6 billion), large U.S. equity funds (25%; $53.5 billion) and stable value funds (11%; $22.6 billion).
Asset classes with the most contributions in May were TDFs (46%; $513 million), large U.S. equity funds (21%; $230 million) and international equity funds (7%; $76 million).
During the month, small U.S. equities rose 6.5%. Large U.S. equities rose 4.8%, international equities were up 3.3% and U.S. bonds were up by 0.5%.