April was another light trading month for participants in defined contribution (DC) plans, the Aon Hewitt 401(k) Index reveals.
On average, 0.026% of 401(k) account balances transferred each day and just three days experienced above-normal trading activity for the month, Aon Hewitt says. When participants made trades they preferred fixed income over equities on about two-thirds of trading days (14 out of 21).
The most popular asset classes for inflows were international ($133 million), GIC/stable value ($65 million) and bond funds ($59 million). The most prevalent classes for outflows were large U.S. equity ($207 million), company stock ($58 million) and money market funds ($34 million).
Target-date funds continued to receive the majority of new contributions into individuals’ accounts, at $394 million, while large U.S. equity funds saw contributions of $211 million.
The monthly results shows participants’ overall allocation to equities inched up from 66.3% to 66.4% in April, after combining contributions, trades, and market activity. Future contributions to equities decreased slightly from 67.4% at the beginning of April to 67.2% at the end of the month, Aon Hewitt says.
Turning to capital market returns, they were mixed during April 2015. Large cap U.S. equities represented by the S&P 500 Index delivered positive returns—as did international equities represented by the MSCI ACWI ex-U.S. Index. At the same time, U.S. small cap equities (represented by the Russell 2000 Index) and U.S. fixed income (represented by the Barclays Aggregate Index) both fell during the month.
Most defined contribution plan participants had also been content to stay put with their investments in March, following a more volatile start to the year.