Investing

401(k) Traders Stayed the Course in 2016

By Rebecca Moore editors@strategic-i.com | January 10, 2017
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December was a light trading month for investors in defined contribution plans according to the Aon Hewitt 401(k) Index—a sharp contrast to November, which saw the highest trading activity in over three years. There were zero above-normal trading days in December. On average, 0.017% of balances traded each day, and when participants made trades, they favored equities over fixed income funds.

Small U.S. equity funds saw $130 million in inflows in December, followed by Large U.S. equity funds ($102 million) and Mid U.S. equity funds ($71 million). Company stock funds saw the most outflows during the month, at $163 million. Bond funds posted outflows of $114 million, while Stable Value funds posted outflows of $49 million.

After combining contributions, trades, and market activity in participants’ accounts, the percentage of balances in equities was 65.4% at the end of December, up from 65.0% at the end of November. New contributions continue to favor stocks, but at a lower rate than in the past. In December, 65.2% of employee contributions were into equities—a decrease from 65.7% in November.

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