Few 401(k) Participants Make Trades in July

Despite volatility, July was a slow trading month for 401(k) investors, according to the Alight Solutions 401(k) Index. July also marks the 18th month in a row that net trades have moved from equities to fixed income. Nineteen of the 22 trading days favored fixed income. On average, only 0.014% of 401(k) balances were traded daily, and there was only one above-normal trading day.

Year-to-date, investors have favored fixed income on 186 trading days, or 86% of the trading days available.

Asset classes with the most trading inflows in the month were bond funds (taking in 52% of the inflows, worth $189 million), international equity funds (14%, $52 million) and money market funds (12%, $43 million).

Asset classes with the most trading outflows were company stock (42%, $154 million), large U.S. equity funds (40%, $143 million) and small U.S. equity funds (9%, $33 million).

Asset classes with the largest percentage of total balances at the end of July were target-date funds (TDFs) (29%, $62.166 billion), large U.S. equity funds (25%, $54.291 billion) and stable value funds (10%, $21.188 billion). Asset classes with the most contributions in July were TDFs (47%, $511 million), large U.S. equity funds (20%, $220 million) and international funds (7%, $79 million).

Returns were very muted during the month, with large U.S. equities rising 1.4%, small U.S. equities up 0.6%, U.S. bonds up 0.2% and international equities down 1.2%.