Sixty percent of days in April had net transfer activity away from equities, according to the Aon Hewitt 401(k) Index. Out of $136 million in net transfer activity for the month, $112 million moved from equities to fixed-income investments. Of the net equity outflows, $35 million (25%) came from company stock, which means $76 million of the outflows are from diversified equities (0.08% of total balances).
Small U.S. equity assets accounted for 46% ($63 million) of the diversified equity outflows, followed by large U.S. at 13% ($17 million). Emerging markets accounted for 9% ($12 million) of the outflows. GIC/stable value and bond asset classes absorbed the majority of the inflows, as each respectively received 46% ($63 million) and 20% ($28 million). Premixed funds, including target-date and target-risk funds, also received 21% ($29 million) of the net inflows for the month.
Following the strong first-quarter returns (strongest quarter since 1998), as equity markets declined throughout April, employee discretionary contributions—a gauge of participant sentiment—withdrew slightly to 62.2% in equity allocations (down from 62.6% in March).
The total asset allocation in equities also declined nominally. Equities now hold 60.4% of total assets, which is a 0.2% decrease for the month.
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