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The Markets October 13, 2015
Participants Stay the Course in September Trading Trends
GIC/stable value, money market and bond funds again saw the most inflows over the month.
Reported by PLANADVISER staff
Defined contribution (DC) participants transferred money from equities to fixed income amid a rough September on Wall Street, according to the Aon Hewitt 401(k) Index. Fixed-income funds were the only asset class with positive net inflows for the month. Additionally, 81% of the trading days in September favored fixed income—the highest ratio of days to fixed-income funds in two years.
September also had four days of above-normal trading activity, the highest number of above-normal days in a month since May. On average, participants transferred 0.026% of total balances in September, the same level as the previous month.
GIC/stable value ($282 million), money market ($70 million) and bond funds ($52 million) saw the most inflows over the month. The most common classes for outflows were target-date funds (TDFs) ($166 million), large U.S. equity ($92 million) and company stock ($70 million). Target-date funds (unchanged from the previous month’s level, at $346 million) continued to receive the majority of new contributions into individuals’ accounts.
When combining contributions, trades and market activity, participants’ overall allocation to equities declined, to 64.6% at the end of September, from 65.4% at the end of August. Future contributions to equities decreased marginally, to 66.7%, from 66.8% in August.
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