401(k) Traders Favored Fixed Income Investments During August

Net trading activity nearly doubled last month, according to the Alight Solutions 401(k) Index. 

Net trading activity among retirement plan participants is on the rise, according to Alight Solutions 401(k) Index.

According to the report, net trading activity in August was 0.13% of balances, up from 0.07% in July. Nearly all trading days in the month saw money moving from equities to fixed income, reported Alight.

The index found that on average, 0.01% of 401(k) balances were traded daily, and 20 of 22 days favored fixed income funds while two days favored equity funds.

During the month of August, trading inflows primarily went to stable value, bond and specialty/sector funds, and outflows were generally posted from large U.S. equity, small U.S. equity and company stock funds. Stable value funds saw 47% of inflows, with bond and specialty/sector funds trailing behind at 28% and 9%, respectively. Large U.S. equity funds saw the most outflows at 36%, while small U.S. equity stocks lost 22% of participant balances and company stock saw outflows of 21%.

Average asset allocation in equities remained the same at 70.2% last month, while new contributions to equities decreased from 69.4% in July to 69.3% in August.

Target date-funds (TDFs) remained as the asset class with the highest percentage of balances and most contributions in August, with 30% of overall balances and 48% of contributions. Large U.S. equity funds hold 27% of overall balances and received 21% of contributions. Stable value funds hold 8% of balances, and international equity funds received 7% of overall contributions.

More information from Alight Solutions is here.