Low Levels of 401(k) Trading Measured During 2017

The Aon Hewitt 401(k) Index shows that March ended an “overall light quarter of trading activity” among 401(k) investors.

Results from the monthly index show the first quarter of 2017 saw no days with above-normal trading activity. Aon Hewitt says this is the first time this has happened in a quarter since the index was established in 1997.

“In March, 401(k) investors had the lightest month of trading activity since September 2016,” the index results show. “Overall, net trades totaled just 0.15% of balances in March and there were no days with above-normal trading activity. When investors made trades, they tended to be more conservative; 18 out of 23 trading days had more inflows to fixed income.”

401(k) investors as a whole ended March with 66.5% of their portfolios invested in equities, a slight increase from 66.4% at the end of February. “When investors made new contributions, they favored equities with 67.3% of contributions going to equities, up from 66.7% in February,” Aon Hewitt reports.

Looking at market results for the month of March, Aon Hewitt reports a quiet four-week period characterized by steady, modest growth. The most exciting storyline came from the international equities category, as represented by the MSCI ACWI ex-U.S. Index, which rallied during the month to return 2.5%. Overall, Aon Hewitt finds Q1 2017 saw strong equity returns, “while fixed-income returns were stable.”

“International equities (represented by the MSCI ACWI ex-U.S. Index) earned nearly 8% during the quarter while U.S. Large-Cap equities (represented by the S&P 500 Index) returned over 6%,” Aon Hewitt says. “Small-Cap equities (represented by the Russell 2000 Index) experienced modest returns during the quarter of 2.5%, while U.S. bonds (represented by the Barclays Capital U.S. Aggregate Bond Index) had a slightly positive return of 0.8%.”

The full index results are available here.