Participants Stay the Course in September Trading Trends

GIC/stable value, money market and bond funds again saw the most inflows over the month.

Defined contribution (DC) participants transferred money from equities to fixed income amid a rough September on Wall Street, according to the Aon Hewitt 401(k) Index. Fixed-income funds were the only asset class with positive net inflows for the month. Additionally, 81% of the trading days in September favored fixed income—the highest ratio of days to fixed-income funds in two years.

September also had four days of above-normal trading activity, the highest number of above-normal days in a month since May. On average, participants transferred 0.026% of total balances in September, the same level as the previous month. 

GIC/stable value ($282 million), money market ($70 million) and bond funds ($52 million) saw the most inflows over the month. The most common classes for outflows were target-date funds (TDFs) ($166 million), large U.S. equity ($92 million) and company stock ($70 million). Target-date funds (unchanged from the previous month’s level, at $346 million) continued to receive the majority of new contributions into individuals’ accounts.

When combining contributions, trades and market activity, participants’ overall allocation to equities declined, to 64.6% at the end of September, from 65.4% at the end of August. Future contributions to equities decreased marginally, to 66.7%, from 66.8% in August.

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