August 27, 2012
net transfer activity remained very low among defined contribution (DC) plan
participants in July. ---
The Aon Hewitt 401(k) Index reports just 0.024% of balances
transferred daily. This is similar to June and is also below the 12-month
trailing average at 0.030%. Transfer volume has been extraordinarily low for
all of 2012, which has already reduced the trailing daily average by
Nevertheless, DC participant monies moved toward
fixed-income during July both in terms of days as well as assets. Fifty-seven
percent of days favored fixed-income investments—similar to June. In total
assets, $237 million transferred out of equities into fixed-income investments.
While the total amount is similar to that of June, only $112 million came from
diversified equities (equities excluding company stock), compared with $253
million in June.
Company stock funds endured the bulk of equity outflows at
$125 million (58%). Large U.S. asset classes had $76 million and small U.S.
asset classes had $33 million in outflows. All other equity asset classes
experienced much lesser gains or losses from transfers for the
All fixed-income asset classes recorded net inflows in July.
Bond funds received the most with $114 million (53%) of inflows, while
GIC/stable value funds took $90 million (42%). Money market funds also received
$28 million in net participant transfers.
Discretionary contributions (employee-only contributions
going into the plan) rebound a full percentage from last month to reach 62.3%
in equities for July. This measure indicates a more favorable participant
outlook toward equities going forward compared with June. However, participant
average equity exposure decreased slightly by 0.2% to 59.1% at the end of July,
in large part due to the transfer outflows.
More information is here.