With an average of 0.035% of balances traded each day—the highest level since January 2013, investors in defined contribution (DC) plans kept busy for the month of November, according to the Aon Hewitt 401(k) index.
Trading activity levels were reported above-normal just days before the November 8 presidential election, with trades moving money from equities to fixed income. There were eight above-normal trading days in November alone, the highest since May 2015.
Among the top in recent history and the highest trading day of 2016 was November 9 when balances traded were at 0.10%, about four and a half times the normal trading level. Following the immediate volatility that occurred after the election, investors were trading into equities at a slower pace for the second half of November.
For asset classes with the most inflows, GIC/stable value funds came in first with $255 million, followed by money market funds ($100 million) and small U.S. equity funds ($56 million). Asset classes with the most outflows included company stock funds ($370 million), bond funds ($74 million) and specialty/sector funds ($38 million).
Combining contributions, trades and market activity in participants’ accounts, the percentage of balances in equities at the end of the month was 65.0%, a minimal increase from 64.4% at the end of October. New contributions saw no change from the previous two months, however, with 65.7% of employee contributions investing in equities.