Investing October 7, 2005

Rita Leaves No Mark on September K Plan Trading

October 7, 2005 (PLANSPONSOR.com) - Hurricane Katrina may have sparked a bit of a 401(k) plan participant exodus out of equities and into fixed income during August, but things were much quieter in September as Hurricane Rita hit the US Gulf Coast.
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New Hewitt Associates data for its 401(k) Index said transfers on the days leading up to Rita stayed in the normal to moderate stage with a trading peak achieved September 22 at 0.07%, according to a Hewitt news release.

Hewitt said participants had an average daily net activity in September of 0.04% with two days of above normal trading. On 10 (48%) of the trading days, activity favored fixed income. The fact that fixed income days and equity days were almost equally split is in line with “a generally lackluster market for the month,” Hewitt wrote in its monthly Index report.

The September report compares to August trends, which saw a Katrina-induced statistical blip (See Katrina Draws August K Plan Assets into Fixed Income ).

During the month, 50.81% of assets moved out of Company Stock while 38.33% exited Large US equity. Some 62.49% of assets moved into International while 17.71% went to Emerging Markets and 11.22% moved into GIC/Stable Value, Hewitt said.

Overall, 22.01% of September K plan contributions went into Large US Equity, 19.22% into GIC/Stable Value and 18.23% into company stock. Some 23.62% of participants’ contributions headed for Large US Equity, 20.87% to GIC/Stable Value and 11.39% into Company Stock.

Participants asset allocation showed 66.5% in equities – unchanged since the beginning of the year, Hewitt said.

The full Hewitt report for September is  here .

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