Human Resources
401(k) Index &  Observations Monthly Details: August 2015

401(k) Index & Observations Monthly Details: August 2015

Market Commentary

Large losses on Wall Street caused a brief burst of trading activity in August, according to the Aon Hewitt 401(k) IndexTM. Although August experienced only two days of above-normal1 trading activity, they occurred on days with some of the biggest stock retreats in recent memory.

On Friday, August 21st while equities were off by about 3%, trading activity was approximately twice the normal level. On Monday, August 24th, as stocks plunged further, the 401(k) Index had the highest trading day since 2011--approximately 7 times normal trading levels.

In August, an average of 0.026% of total balances transferred. This was slightly higher than the averages for July (0.021%) and June (0.024%) but less than May’s average of 0.031%.

  • GIC/stable value, money market, and bond funds saw the most inflows over the month.
  • The most common classes for outflows were target-date funds2, small U.S. equity, and international funds.
  • Target-date funds continued to receive the majority of new contributions into individuals’ accounts.

Asset Classes with Most Trading Inflows

Percent of Inflows Index Dollar Value ($ mil)
GIC/stable value funds 58% $222
Money market funds 27% $104
Bond funds 11% $43


Asset Classes with Most Trading Outflows

Percent of Outflows Index Dollar Value ($ mil)
Target-date funds 59% $227
Small U.S. equity funds 11% $42
International funds 8% $33


Asset Classes with Most Contributions

Percent of Contributions Index Dollar Value ($ mil)
Target-date funds 40% $346
Large US equity funds 19% $168


Asset Classes

Percent of Balance Index Dollar Value ($ mil)
Target-date funds 23% $37,695
Large U.S. equity funds 22% $36,046
GIC/stable value funds 13% $21,623


  • When combining contributions, trades, and market activity, participants’ overall allocation to equities declined in August to 65.4%, from 66.4% in July. Future contributions to equities remained at 66.8%.

Amongst growing concerns over the Chinese economy, capital market performance struggled in August.

  • U.S. Fixed Income (represented by the Barclays Aggregate Index), U.S. Small-Cap equities (represented by the Russell 2000 Index, U.S. Large-Cap equities (represented by the S&P 500 Index), and International equities (represented by the MSCI ACWI ex-US Index) all experienced negative returns.

The following tables show Aon Hewitt 401(k) IndexTM statistics and the returns of major market indices for periods ending August 31, 2015.


Index Statistics

August 2015 YTD
Total Transfers as Percent of Starting Balance 0.23% 0.91%
Number of Fixed Income Days 10 (48%) 81 (50%)
Number of Equity Days 11 (52%) 82 (50%)
Number of Above-Normal1 Days 2 28


Indices Returns

August 2015 YTD
Barclays Capital U.S. Aggregate Bond Index -0.1% 0.5%
S&P 500 -6.0% -2.9%
Russell 2000 Index -6.3% -3.0%
MSCI All Country World ex-U.S. Index (net) -7.6% -4.2%

1 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) IndexTM 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.
2 Target-date funds also include the amounts in target-risk funds for companies who do not have target-date funds. The amount in the target-risk funds is less than 10% of the total.