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 14%.
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 month.
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.
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