October a Light Month for K Plan Transfers

November 8, 2005 (PLANSPONSOR.com) - Investor unease with the stock and bond markets in October led to a flight to safety by 401(k) investors who dashed through the exits to the waiting arms of GIC/Stable Value funds.

Hewitt Associates data for its monthly 401(k) Index said that despite three days in October when trading activity briefly came back to life, overall the month was comparatively quiet with an average daily activity of only 0.03%, according to a Hewitt news release. Overall, there were 12 days during which fixed income dominated and nine for equities.

According to the release, the GIC/Stable Value trend involved almost 75% of all K plan transfers going from stocks or bonds.

The October report compares to September trends, which saw fixed iincome and equity trading days almost equally divided. (See   Rita Leaves No Mark on September K Plan Trading).

Hewitt said that October marked the tenth consecutive month in which largeUS equity funds have suffered outflows of more than $1 billion year to date. Small stock funds have likewise lost ground in the asset statistics. Among those who did move into equities during the month, Hewitt said almost 17% of transfer activity went to international and emerging market funds.

The Hewitt data showed that 27.95% of K plan funds moved out of Large US equity funds over the month while Small US Equity saw a 13.12% outflow and balanced funds had a 12.06% outflow.

During October, 73.21% of assets were moved into GIC/Stable Value and 11.14% went into International offerings.

The full Hewitt report for October is  here .