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

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

Market Commentary

  • Despite record-high indices on Wall Street, many participants in defined contribution plans did little to rebalance their portfolio in February, according to Aon Hewitt’s 401(k) IndexTM. Overall, there were two days of above-normal1 trading activity in February and for the month the total trading activity amounted to 0.022% of total balances.
  • When participants made trades, they tended to favor fixed income over equities. The most popular asset classes for outflows were large U.S. equity, company stock, and small U.S. equity funds and the most common classes for inflows were GIC/Stable value, international, and money market. Target-date funds2 continue to receive the majority of new contributions into individuals’ accounts.

Asset Classes with Most Trading Outflows

Percent of Outflows Index Dollar Value ($ mil)
Large U.S. equity funds 48% $158
Company stock funds 33% $110
Small U.S. equity funds 19% $61


Asset Classes with Most Trading Inflows

Percent of Inflows Index Dollar Value ($ mil)
GIC/Stable value funds 26% $85
International funds 26% $84
Money market funds 15% $49


Asset Classes with Most Contributions

Percent of Contributions Index Dollar Value ($ mil)
Target-date funds 35% $366
Large US equity funds 18% $186
Company stock funds 11% $113


  • Combining contributions, trades and market activity, participants’ overall allocation to equities increased to 66.5% from 65.6% in February. Future contributions to equities saw little fluctuation from last month (66.4% in February compared to 66.3% in January).
  • The global equity markets posted a strong month following a disappointing January. The S&P 500 Index, a measure of U.S. large-cap equities, and the Russell 2000 index, a measure of U.S. small-cap equities, both hit all-time highs during the month of February and returned 5.8% and 5.9%, respectively. Non-U.S. equities also performed well as the MSCI All Country World ex-U.S. Index gained 5.4%. The Barclays U.S. Aggregate Index, a measure of the domestic fixed income market decreased during the month, returning -0.9%.

The following tables show Aon Hewitt 401(k) Index™ statistics and the returns of major market indices for periods ending February 28, 2015.


Index Statistics

February 2015 YTD
Average Daily Net Activity 0.022% 0.024%
Number of Fixed Income Days 11 (61%) 16 (43%)
Number of Equity Days 7 (39%) 22 (57%)
Number of Above-Normal1 Days 2 7


Indices Returns

February 2015 YTD
Barclays Capital U.S. Aggregate Bond Index -0.9% 1.1%
S&P 500 5.8% 2.6%
Russell 2000 Index 5.9% 2.5%
MSCI All Country World ex-U.S. Index (net) 5.4% 5.2%

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.