Participants Continue Move to Fixed Income in July

August 9, 2006 ( - Market volatility has driven 401(k) participants to favor fixed income funds for the second month in a row, according to the Hewitt 401(k) Index.

Participant 401(k) fund transfers were fixed-income oriented for almost two-thirds of the month, and 401(k) balances held in equities reached their lowest level in nine months at 66.8%. Domestic equity funds had over $300 million transfer out in July, Hewitt data shows.

Lifestyle funds recorded the largest inflow of participant transfers, receiving 31.5% of transferred dollars. GIC/Stable Value funds pulled in 27.6% of participant transfer dollars and Money Market funds pulled in 17.9%.

Large US Equity funds continued to pull in more of participants’ new money, receiving 22.4% of participants’ contributions. GIC/Stable Value funds were participants’ second choice for new contributions, receiving 17.7% of participants’ new money.

GIC/Stable Value funds held the biggest slice of 401(k) balances in July at 22.13%, followed by Company Stock at 21.17% and Large US Equity at 20.53%.

The Hewitt data is available  here .