June 27, 2012
--- Defined contribution (DC) plan participants
transferred monies from equities into fixed-income investments as the stock
markets dropped substantially during May, Aon Hewitt found. ---
According to the results of the Aon Hewitt 401(k)
Index, 64% of the days had transfer
activities that favored fixed-income funds during the month. In sum, nearly
$140 million moved from diversified equities (equity excluding company stock)
into fixed-income investments.
International equity funds lost $44
million (24%) in net transfers, followed by pre-mixed funds ($34 million, 19%)
and small U.S. equity funds ($29 million, 16%). Seventy percent of the
transferred assets went into bond funds, netting an additional $126 million.
Although major equity indices were down markedly, company stock funds
experienced positive flows for the first month since September 2011, totaling
$47 million.
The overall equity allocation in the
Index was down 1.5 percentage points, to 58.9% at the end of May, from 60.4% at
the end of April, because of market weakness and changes in participant
behavior. Another measure of participant sentiment is discretionary
contributions (employee only contributions). In total, 61.3% of employee
discretionary contributions were directed to equities by the end of May, down
from 62.2% in April.
More information is here.
Rebecca Moore