Defined contribution (DC) plan investors went through a shaky month of generally
negative equity and fixed-income returns, coupled with light trading, according to Aon
Hewitt’s 401(k) Index.
firm reports that only 0.16% of total balances traded in
the month, and there were just two days of above-normal trading activity.
For participants who traded, 15 out of 21 trading days favored fixed-income
funds over equity funds.
According to Aon Hewitt data, asset
classes with the most trading were GIC/stable value funds (36%), international
funds (23%) and money market funds (20%). Funds that saw the most contributions
in October were target-date funds (TDFs) and large U.S. equity funds. TDFs
also held the largest percentage of balances at the end of October (24%) across the 401(k) market. Preceding TDFs were large U.S. equity funds (22%) valued at
$37,549 and GIC/stable value funds (13%) valued at $22,664 million
Overall, Aon Hewitt says the month was mostly negative
for investors. U.S. Small-Cap equities (represented by the Russell 2000 Index)
fell nearly 5%, while U.S. bonds (represented by the Bloomberg Barclays U.S.
Aggregate Index) fell nearly 1%. U.S. Large-Cap equities (represented by the
S&P 500 Index) fell nearly 2% and International equities (represented by
the MSCI All Country World ex-USA Index) fell approximately 1.5%.