Participant Transfers in July Remain Fixed Income Oriented

Approximately $449 million (or 0.42% of total assets) moved from equities to fixed income investments during the month, with the majority coming out of company stock funds. Excluding company stock, only $169 million shifted from diversified equities to fixed income investments.   

Over three-quarters of the days in July experienced fixed income-oriented transfers.  

GIC/stable value funds received nearly half (46%) of the inflows, with $254 million transferring into this asset class. Bond funds received net transfers of $177 million, which represented 32% of the inflows.   

As international markets rallied (the MSCI EAFE Index rose 9.5%), international funds also saw inflows of $92 million, which reversed the trend of outflows since February this year, Hewitt said.  

Company stock funds experienced the largest outflows of the month, with $280 million transferring out of this asset class. Large U.S. equity also had significant outflows of $162 million, followed by small U.S. equity ($70 million). 

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Participants Contributed to Equities  

The Hewitt 401(k) Index showed participants' overall equity allocation was up by 1%, to 57.3% at the end of July, due to strong stock market performance. Employee-only equity contributions were virtually unchanged, with 60.1% going into equities, versus 60.2% in June.  

Lifestyle-premixed funds took in 24.5% of employee-only contributions, followed by GIG/stable value funds (19.16%) and Large U.S. equity funds (17.34%).   

On average, 0.03% of balances transferred on a net daily basis in July. There were above normal-levels of transfers on three days during the month.  

The Hewitt 401(k) Index is here.