Human Resources
401(k) Index &  Observations Monthly Details: December 2014

401(k) Index & Observations Monthly Details: December 2014

Market Commentary

  • In December, defined contribution plan participants were light traders, with only two days of above-normal* transfer activity, according to Aon Hewitt’s 401(k) Index™. Overall, 0.022% of total assets traded in December, with a slight preference of days (55%) favoring equities over fixed income assets.
  • When participants made trades, they were most likely to sell out of premixed funds, small U.S. equity funds and company stock and buy into large U.S. equity, international, and balanced funds.

Asset Classes with Most Trading Outflows

Percent of Outflows Index Dollar Value ($ mil)
Premixed funds 53% $141
Small U.S. equity funds 24% $64
Company stock funds 14% $38


Asset Classes with Most Trading Inflows

Percent of Inflows Index Dollar Value ($ mil)
Large U.S. equity funds 52% $137
International funds 15% $39
Balanced funds 10% $27


  • After incorporating December’s contributions, trades, and market activity, the overall participant allocation to equities increased slightly from 66.0% in November to 66.4% in December. Future contributions to equities decreased marginally month-over-month from 66.3% to 66.1%.
  • U.S. equities posted mixed results during the last month of the year. The S&P 500 Index, a measure of U.S. large-cap equities, returned -0.3% during December. Small-cap equities outperformed their large-cap counterparts as the Russell 2000 Index gained 2.9% during the month. The fixed income market, as measured by the Barclays U.S. Aggregate Index, was flat, returning 0.1%. The MSCI All Country World ex-U.S. Index, a benchmark used to represent companies based in the developed markets outside of the U.S., had a poor showing in December, returning -3.6%.
  • The quarter ending December 31 was easily the heaviest trading quarter of 2014 with 11 of the 24 above-normal days that occurred during the year. Just over half (52%) of all trading days favored fixed income funds. The domestic equity markets performed well during the fourth quarter as both the S&P 500 Index and the Russell 2000 Index posted positive results, returning 4.9% and 9.7%, respectively. U.S. bonds also posted positive results over the trailing three month period, as the Barclays Aggregate Index gained 1.8%. The MSCI All Country World ex-U.S. Index had a volatile quarter and returned -3.9% during the period.

The following tables show Aon Hewitt 401(k) Index™ statistics and the returns of major market indices for periods ending December 31, 2014.


Index Statistics

December Q4 2014 YTD
Average Daily Net Activity 0.022% 0.025% 0.023%
Number of Fixed Income Days 10 (45%) 33 (52%) 130 (53%)
Number of Equity Days 12 (55%) 31 (48%) 118 (47%)
Number of Above Normal Days 2 11 23


Indices Returns

December Q4 2014 YTD
Barclays Capital Aggregate Bond Index 0.1% 1.8% 6.0%
S&P 500 -0.3% 4.9% 13.7%
Russell 2000 Index 2.9% 9.7% 4.9%
MSCI All Country World ex-U.S. Index (net) -3.6% -3.9% -3.9%

*A “normal” level of relative transfer activity is when the net daily movement of participants’ balances, as a percent of total 401(k) balances within the Aon Hewitt 401(k) Index™ equals between 0.3 times and 1.5 times the average daily net activity of the preceding 12 months. A “high” relative transfer activity day is when the net daily movement exceeds two times the average daily net activity. A “moderate” relative transfer activity day is when the net daily movement is between 1.5 and 2 times the average daily net activity of the preceding 12 months.