The Markets October 6, 2016

401(k) Participant Transfers Still Favoring Fixed Income

However, Aon Hewitt data shows new contributions continue to favor stocks, with 65.7% of employee contributions investing in equities—a slight increase from 65.6% in August.
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September was another light month of trading for 401(k) investors with 0.14% of total balances traded in the month and one day of above-normal trading activity, according to the Aon Hewitt 401(k) Index.

GIC/stable value funds gained $121 million in participant assets, while money market funds gained $65 million and bond funds gained $27 million. Meanwhile, company stock funds lost $99 million in 401(k) participant assets; large U.S. equity funds lost $88 million; and target-date funds lost $24 million.

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However, new contributions continue to favor stocks, with 65.7% of employee contributions investing in equities—a slight increase from 65.6% in August. After combining contributions, trades, and market activity in participants’ accounts, the percentage in equities remained unchanged from August at 64.9%.

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