Investing May 21, 2008

Participants Cautious Despite Market Uptick in April

May 21, 2008 (PLANSPONSOR.com) - Despite the strong stock market performance in April, 401(k) participants had mixed investment sentiment, according to the results of the Hewitt 401(k) Index.
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Participants shifted monies from equities to fixed income investments during 55% of the days in April; however, a net of $98 million in assets were moved from fixed income funds to equity funds during the month, Hewitt said. Net transfer activity spiked on April 1st and April 18th, when the NASDAQ Index rose 3.7% and 2.6%, respectively, but the directions of the transfers on both days were fixed-income oriented.

GIC/stable value funds received the largest net transfers in April of nearly $230 million. Lifestyle funds also saw strong net inflows of $197 million during the month, the Hewitt data showed.

During April, large U.S. equity funds received small, positive net inflows of $7 million. The largest net outflows by 401(k) participants was posted to company stock funds (over $315 million), and balanced funds also saw large outflows of $217 million in April.

Lifestyle funds won the biggest share of participant contributions at 20.62%, followed by Large U.S. Equity at 19.83%. GIC/Stable Value funds received 16.67% of participant contributions during the month.

GIC/Stable Value investments (22.66%), Large U.S. Equity funds (19.19%), and Company Stock funds (16.15%) held the biggest slices of 401(k) assets at the end of the month.

The Hewitt 401(k) Index is here .

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