Transfer Fund Flows Flip in August
Participant transfer volumes remained in the summer doldrums in August, according to the Aon Hewitt 401(k) Index
When trading occurred, plan participants favored fixed income funds over equity funds for 65% of the trading days, a turnabout from trends in the prior month. Overall, transfer activity moved away from diversified equities (equity assets excluding company stock) by $78 million (0.05%).
Just 0.020% of balances were transferred during the month — the tenth consecutive month that trading activity was below 0.03%. Total transfer activity was $214 million or 0.13% of total assets, with zero days in August having above what AonHewitt classifies as “normal” trading activity.
Stable value/GIC funds received the most inflows with $61 million (28%), while bond funds took in $40 million (19%) and money market funds received $32 million (15%). The options with the most outflows were:
- small U.S. equity funds with $93 million (44%),
- company stock funds with $64 million (30%), and
- mid U.S. equity funds with $40 million (19%) for the month.
After incorporating trading and market activity, participants’ overall allocation to equities was up slightly at 66%.