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

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

Market Commentary

  • According to Aon Hewitt’s 401(k) Index™, participants in defined contribution plans were light traders in November, with only two days of above-normal* transfer activity. This is a sharp contrast to October, which had seven above-normal days of trading, but in line with the rest of 2014. Overall, November saw 0.023% of total assets traded with slightly more (53%) trading days favoring fixed income assets over equities. Transfers away from diversified equities (equity assets excluding company stock) totaled $136 million.
  • The asset classes with the most inflows included large U.S. equity funds with $150 million (42% of all asset trades), bond funds with $63 million (18%) and money market funds receiving $39 million (11%).
  • Company stock funds led the net outflow activity with $228 million (64%), followed by small U.S. equity with $59 million (17%) and GIC/Stable with $35 million (10%).
  • After incorporating trading and market activity, participants’ overall allocation to equities increased slightly to 66.0% from 65.7% last month. Future contributions to equities decreased marginally to 66.3% from 66.4%.
  • On Wall Street, November was a positive month for the major asset classes. U.S. large-cap equities, as measured by the S&P 500 Index, gained 2.7% during the month. Small-cap equities underperformed their large-cap counterparts but still posted a positive return of 0.1%, as measured by the Russell 2000 Index. The Barclays U.S. Aggregate Index, a measure of the fixed income market, returned 0.7% during November. Non-U.S. equities, as measured by the MSCI All Country World ex-U.S. Index, rebounded from a poor showing in October and returned 0.7% during the month.

The following tables show Aon Hewitt 401(k) Index™ statistics and the returns of major market indices for periods ending November 28, 2014.


Index Statistics

November 2014 YTD
Average Daily Net Activity 0.023% 0.023%
Number of Fixed Income Days 10 (53%) 120 (53%)
Number of Equity Days 9 (47%) 106 (47%)
Number of Above Normal Days 2 21


Indices Returns

November 2014 YTD
Barclays Capital Aggregate Bond Index 0.7% 5.9%
S&P 500 2.7% 14.0%
Russell 2000 Index 0.1% 2.0%
MSCI All Country World ex-U.S. Index (net) 0.7% 0.3%

*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.