Transfer activity remained consistently below average throughout the month, however, transferring just 0.06% of balances per day in the index, rather than the trailing 12-month average of approximately 0.08%. That muted volume, as well as the fact that net transfers favored equity investments twice as many trading days during the month, mirrored April’s activity (see April Transfers Slow, But Equity-Oriented ).
May marked another exuberant month for major US stock indices, the NASDAQ soared 8.99%, while the Dow ended the month 4.37% higher, and the S&P 500 gained 5.09%.
Funds continued to flow from GIC/Stable Value investments – nearly $200 million over the course of the month – and into Small US Equity and Large US Equity options, some $105 million and $60 million, respectively, according to Hewitt. In fact, more than half of the outflows during the month came from GIC/Stable Value options, with another 29.46% coming from company stock, and the remaining 17% from money market funds.
Participants appeared to be looking for some asset allocation help, with more than 13% of the net transfers in directed to balanced funds, and another 9.11% directed toward lifestyle/pre-mixed options. International offerings attracted roughly 13% of the net inflows, while self-directed brokerage windows pulled nearly 8%.
When all the transfer shifts were completed, however, GIC/Stable Value continued to dominate, comprising nearly 27.5% of the $70 billion index. Company stock continued to enjoy second place, with 24.26%, while large US equity allocations were close behind with 21.3% of the total. Balanced offerings made up 7.55% of the total, while bond funds held 5.5%, and 4.87% was invested in lifestyle/pre-mixed options.
Regarding new contributions, company stock drew most of the new money, with more than 23% directed to that investment. Large US equity options pulled in nearly that much, while GIC/Stable Value funds received 21.29% of the new contributions. Nearly 8% went to bond funds, about 7% was directed to lifestyle/pre-mixed offerings, and balanced funds drew 4.37%.
The Hewitt 401(k) Index tracks the activity of some 1.5 million participants.