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The Markets September 22, 2016
DC Participants Favored Fixed Income in August
However, participants mostly stayed put, as trading activity was very low.
Reported by Rebecca Moore
Trading in defined contribution plans in August was amongst the lowest on record, according to the Aon Hewitt 401(k) Index.
Just 0.11% of total balances traded in the month—the second lowest monthly total ever (0.10% in April 2012). No days in August had above-normal trading activity. The average daily trading activity for the month was 0.013%, the lowest monthly level since Aon Hewitt began tracking trading activity in 1997.
When trading did occur, bond funds received the most inflows ($86 million), followed by GIC/stable value funds ($42 million) and emerging markets funds ($26 million). Asset classes with the most outflows included company stock funds ($83 million), large U.S. equity funds ($61 million) and small U.S. equity funds ($15 million).
After combining contributions, trades, and market activity in participants’ accounts, the percentage in equities at the end of August was 64.9% a decrease from 65.8% in July. New contributions continue to favor stocks, with 65.6% of employee contributions investing in equities—a slight decrease from 65.7% in July.
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