DC Participant Trading Light in February

Participants in defined contribution plans did little to rebalance their portfolios in February.

The Aon Hewitt 401(k) Index only saw two days of above-normal trading activity in February, and for the month the total trading activity amounted to 0.022% of total balances.

When defined contribution (DC) plan participants made trades, they tended to favor fixed income over equities, the index results show. The most popular asset classes for outflows were large U.S. equity ($158 million), company stock ($110 million), and small U.S. equity funds ($61 million). The most common classes for inflows were GIC/stable value ($85 million), international ($84 million), and money market ($49 million).

Target-date funds continued to receive the majority of new contributions (35%) into individuals’ accounts in February, followed by large U.S. equity funds (18%) and company stock funds (11%).

Combining contributions, trades and market activity, participants’ overall allocation to equities increased to 66.5% from 65.6% in February. Future contributions to equities saw little fluctuation from last month (66.4% in February compared to 66.3% in January).

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