The MarketsJune 22, 2016

401(k) Participants Continued to Favor Fixed Income in May

Asset classes with the most inflows were Bond funds, GIC/Stable Value funds, and Money Market funds.

Reported by Rebecca Moore

May was another light month of trading activity by 401(k) investors, according to the Aon Hewitt 401(k) Index.

In total, 0.16% of balances traded in May—which is the same percentage of balances traded in April. For the month of May, there were two days of above-normal trading activity.

Asset classes with the most inflows were Bond funds ($121 million), GIC/Stable Value funds ($89 million), and Money Market funds ($34 billion). The most trading outflows were posted to Large U.S. Equity funds ($152 million), Mid U.S. Equity funds ($34 million), and Company Stock funds ($24 million).

After combining contributions, trades, and market activity in participants’ accounts, the percentage in equities at the end of May remained unchanged at 64.8%. New contributions continue to favor stocks, with 65.7% of employee contributions invested in equities—a decrease from 65.9% in April.

Target-date funds ($373 million) and Large U.S. Equity funds ($180 million) received the most employee contributions in May, and target-date funds had the largest percentage of total participant balances, at 24%.

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