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

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

December 2015 Review

According to the Aon Hewitt 401(k) IndexTM, December 2015 saw higher than normal trading activity by defined contribution plan participants. Overall, an average of 0.03% of total balances traded in December. In 2014 and 2015, only two other months had an average of 0.03% or higher. Five days in December had above-normal1 trading activity. Participants slightly favored fixed income over equities when they made trades with 55% of the trading days showing more inflows to fixed income.

After reflecting contributions, trades, and market activity in participants’ accounts, the percentage in equities decreased to 65.4% at the end of December, down slightly from 65.6% at the end of November. Future contributions to equities decreased to 63.7%, from 66.4% in November.


Asset Classes with Most Trading Inflows in December

Percent of Inflows Index Dollar Value ($ mil)
GIC/stable value funds 54% $119
Emerging markets funds 21% $46
Small U.S. equity funds 18% $39


Asset Classes with Most Trading Outflows in December

Percent of Outflows Index Dollar Value ($ mil)
Company stock 24% $54
Mid U.S. equity funds 23% $50
International funds 21% $46
Target-date2 funds 18% $30


Asset Classes with Most Contributions in December

Percent of Contributions Index Dollar Value ($ mil)
Target-date funds 42% $498
Large U.S. equity funds 19% $222

Asset Classes with Largets Percentage of Total Balance at end of December

Percent of Balance Index Dollar Value ($ mil)
Target-date funds 23% $37,982
Large U.S. equity funds 23% $37,251
GIC/stable value funds 13% $21,710

Fourth Quarter 2015 Review

Activity in the fourth quarter of 2015 was a continuation of themes from the previous quarter. For the quarter ending December 31, net trading activity saw participants overwhelmingly favor fixed income funds over equity instruments. The majority of outflows came from target-date funds.

Asset Classes with Most Trading Inflows in Q4 2015

Percent of Inflows Index Dollar Value ($ mil)
GIC/stable value funds 49% $284
Bond funds 27% $154
Money market funds 13% $77

Asset Classes with Most Trading Outflows in Q4 2015

Percent of Inflows Index Dollar Value ($ mil)
Target-date funds 45% $261
Company Stock 31% $180
Mid U.S. equity funds 16% $93

Market Observations

December market returns were declined:

  • U.S. Small-Cap equities (represented by the Russell 2000 Index), U.S. Large-Cap equities (represented by the S&P 500 Index), bond index (represented by the Barclays Capital U.S. Aggregate Bond Index), and International equities (represented by the MSCI ACWI ex-US Index) had negative returns.

Aon Hewitt 401(k) IndexTM statistics and the returns of major market indices for periods ending December 31, 2015:


Index Statistics

December 2015 Q4 2015 YTD
Total Transfers as Percent of Starting Balance 0.13% 0.36% 1.52%
Number of Fixed Days 12 (55%) 41 (64%) 139 (56%)
Number of Equity Days 10 (45%) 23 (36%) 109 (44%)
Number of Above-Normal* Days 5 7 39


Indices Returns

December 2015 Q4 2015 YTD
Barclays Capital U.S. Aggregate Bond Index -0.3% -0.6% 0.6%
S&P 500 Index -1.6% 7.0% 1.4%
Russell 2000 Index -5.0% 3.6% -4.4%
MSCI All Country World ex-U.S. Index (net) -1.9% 3.2% -5.7%

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.