401(k) Participants Exit Fixed Income in March

May 2, 2012 ( - Transfer activity in March was low, with just 0.024% of total defined contribution plan balances transferring plan assets daily, on average, according to the Aon Hewitt 401(k) Index.

By Rebecca Moore | May 02, 2012
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The net direction of transfers during the month was toward equities, despite 55% of days favoring fixed income investments. Overall, $151 million transferred into diversified equities (equities excluding employer stock) from fixed income investments.   

The outflows from company stock did not offset the net transfer amount by much ($39 million), allowing the net transfer movement for the month to record a noteworthy $112 million away from fixed income. The total transfer amount was $219 million within the Index for March, about a third less than both January and February.  

GIC/stable value funds accounted for 44% ($95 million) of the outflows, followed by bond assets at 30% ($66 million). Company stock had 18% ($39 million) of outflows, and the small U.S. equity asset class accounted for the remaining 8% ($17 million).  

The largest inflow amounts went into lifestyle/pre-mixed funds and large U.S. equity funds, which received 41% ($90 million) and 40% ($88 million) of inflows, respectively. Participants also moved 6% ($12 million) of net inflows into self-directed brokerage window funds.