DC Participants Continued Move to Fixed Income in October

GIC/stable value funds led inflows during the month. 

October was a slow month for trades in defined contribution (DC) plans as participants transferred an average of 0.018% of total balances per day—the lowest monthly trading level since June 2014, according to the Aon Hewitt 401(k) Index.

When participants made trades, they favored fixed income over equities, with 77% of the trading days showing more inflows to fixed income. GIC/stable value funds led inflows ($139 million), followed by bond funds ($134 million) and money market funds ($64 million).

Target-date funds led outflows for the month, losing $117 million. Company stock funds saw net outflows of $107 million, while large U.S. equity funds shed $80 million.

When combining contributions, trades, and market activity, participants’ overall allocation to equities increased to 65.5% at the end of October, up from 64.6% at the end of September. Future contributions to equities decreased marginally, to 66.0% from 66.4% in September.

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