July Was Busiest DC Plan Trading Month Since January

Data from the Aon Hewitt 401(k) Index shows relatively vigorous trading activity by U.S. retirement plan participants. 

Following a strong month for the stock market, data from the Aon Hewitt 401(k) Index shows July had the highest volume of trading in 401(k) plans since January 2016.

Investors were largely moving money away from equities and into fixed income, according to Aon Hewitt. In fact, July saw 18 of the 20 trading days favoring inflows to fixed-income funds and 90% of the net trading dollars going from equities to fixed income.

Other key findings show 0.39% of balances were traded in July, up from just 0.19% in June, while just four days saw above-average trading activity. Interestingly, GIC/stable value funds received nearly half of inflows (46%) despite decent market performance, with bond funds receiving almost one-third of inflows (31%).

Overall, new contributions to 401(k)s favored stocks, with 65.7% of employee contributions investing in equities—a slight increase from 65.5% in June.

More detailed trading data and additional market observations are available online here