Fixed income experienced net gains from transfer activity for 17 of the 20 trading days (85%) in the month, according to the Aon Hewitt 401(k) Index. During the third quarter, fixed income was favored for 63% of days, while year-to-date daily trading was equally divided—exactly half of the days favored fixed income, and the other half favored equities.
Net transfer activity for September moved away from diversified equities (equity assets excluding company stock) by $160 million (0.11%). Total transfer activity across the index was $489 million for the month. For the third quarter, diversified equities still managed positive flows, receiving $106 million (0.07%) of net transfers.
Outflow activity was led by company stock funds, with $201 million (41%) transferring out. Large U.S. and premixed funds also decreased significantly, by $84 million (17%) and $81 million (17%) respectively. Bond funds were also down by $62 million (13%) due to flows.
Net inflows for September were led by GIC/stable value funds, which received $357 million (73%) of the flows. Money market funds received $99 million (20%), and international funds received $30 million (6%).
At the third quarter close, bond funds had lost the most, $469 million (37%), due to outflows, while GIC/stable value funds had received $705 million (56%) of the inflows.
Employee discretionary contributions, another measure of participant sentiment, increased to 64.9% in equities for September, up from 64.3% in August. By the end of September, participants’ overall equity allocations averaged 63.3%, up from 62.8%. The increase was due primarily to market movement.
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