401(k) Participants Turn Cautious in November

While overall transfer activity was modest in November, four days of the month experienced above-normal levels of transfers, each of which was fixed-income oriented, Hewitt said. Participants moved assets out of equities and into fixed-income investments on 76% of the days of the month.

All equity asset classes except International experienced net outflows, with $553 million shifting out of equities and into fixed-income investments during the month, Hewitt data showed. In contrast, the three fixed-income asset classes (Money Market, Stable Value, and Bond) received over $600 million of inflows.

Nearly 60% of transferring 401(k) money moved into GIC/stable value during November, and Bond funds received $178 million in transfers in the month. Large U.S. Equity was the biggest loser of the month, as participants moved a total of $231 million out of this asset class.

Small U.S. Equity saw $158 million transferring out for the month.

At the end of November, participants’ overall allocation to equity investments was 67.1%, down from 68.1% at the end of October. Large U.S. Equity held 20.59% of 401(k) balances at the end of November, GIC/Stable Value held 20.46%, and Company Stock held 16.86%.

The majority of participant-only contributions went into Large U.S. Equity funds (21.03%), Lifestyle/Pre-mix funds (17.8%), and GIC/Stable Value funds (15.54%). Large U.S. Equity, Lifestyle/Pre-mix, and Company Stock funds received the majority of overall contributions in November: 19.25%, 16.38%, and 15.72%, respectively.

The Hewitt 401(k) Index is here .