As Aon Hewitt explains, a “normal” level of relative transfer activity is when the net daily movement of participants’ balances as a percent of total 401(k) balances within the Aon Hewitt 401(k) Index equals between 0.3 times and 1.5 times the average daily net activity of the preceding 12 months. “High” and “moderate” daily relative transfer activity occurs when the net daily movement of 401(k) assets exceeds two times and 1.5 times the average daily net activity, respectively.

Importantly, most of the elevated trading days occurred early in October, following a sharp but short-lived increase in volatility in U.S. and global markets. In fact, the first 13 days of October brought five days of the seven days of moderate or high trading activity. To put that in perspective, from January through September 2014, there had been only 12 total elevated trading days among 401(k) plan participants.

At the time, Rob Austin, director of retirement research at Aon Hewitt, told PLANSPONSOR that market volatility was clearly to blame for elevated (often inappropriate) trading. He also said participants’ tendency to move more towards fixed-income investments as equities lose value is ultimately self-defeating, “because it results in participants’ buying equity high and selling equity low.”

While October was a volatile month for the markets, most equity indices still trended upward. United States large-cap equities, as measured by the S&P 500 Index, returned 2.4% during the month of October. Small-cap equities outperformed their large-cap counterparts as the Russell 2000 gained 6.6%. The Barclays U.S. Aggregate Index, a common measure of the fixed-income market, posted a return of 1.0% and the MSCI All Country World ex-U.S. Index, a benchmark used to represent companies based in the developed markets outside of the U.S., had its second consecutive month of negative performance, with a return of -1.0%, according to Aon Hewitt.

Overall for October, nearly $400 million of 401(k) balances transferred, representing roughly 0.25% of total assets—both record highs for the year. All but one of the above-normal days had participants favoring fixed-income funds over equities, Aon Hewitt says. In fact, fixed-income assets were favored over equities on 57% of the trading days in October. Transfers away from diversified equities (equity assets excluding company stock) totaled $228 million.

Fixed-income funds also saw the most inflows in October, according to the Aon Hewitt 401(k) Index. Bond funds gained $176 million (44% of all asset trades); GIC/stable value funds received $119 million (30%); while money market funds took in $65 million (16%).

Company stock funds led the net outflow activity with $110 million (27%), followed by small U.S. equity and mid U.S. equity, with $102 million (26%) and $85 million (21%), respectively. Lifestyle and premixed funds lost $78 million (20%).

After incorporating trading and market activity, participants’ overall allocation to equities increased marginally to 65.7% from 65.5% last month. Future contributions to equities decreased to 66.4% from 67.0%.