401(k) Index & Observations Monthly Details: April 2016
April 2016 Review
April was a light trading month for 401(k) investors, according to the Aon Hewitt 401(k) Index. In total, 0.16% of balances traded in April—down from 0.25% in March. There were zero days of above-normal1 trading activity for the month.
The asset classes with the most inflows were fixed income funds and the funds with the most outflows leaving equity funds. Fourteen out of 21 of trading days showed more inflows to fixed income.
Asset Classes with Most Trading Inflows in April
|
Percentage of Inflows |
Index Dollar Value ($ mil) |
| Bond funds |
49% |
$130 |
| GIC/Stable value funds |
32% |
$85 |
| Money markets funds |
11% |
$28 |
Asset Classes with Most Trading Outflows in April
|
Percentage of Outflows |
Index Dollar Value ($ mil) |
| Large U.S. equity funds |
25% |
$66 |
| Company stock funds |
20% |
$53 |
| International funds |
15% |
$39 |
| Small U.S. equity funds |
14% |
$37 |
After combining contributions, trades, and market activity in participants’ accounts, the percentage in equities in at the end of April remained unchanged at 64.8%. New contributions still favor stocks, but the employee contributions to equities slightly fell to 65.9% in April from 66.0% in March.
Asset Classes with Most Contributions in April
|
Percentage of Contributions |
Index Dollar Value ($ mil) |
| Target-date2 funds |
40% |
$429 |
| Large U.S. equity funds |
19% |
$208 |
Asset Classes with Largest Percentage of Total Balance at end of April
|
Percentage of Balance |
Index Dollar Value ($ mil) |
| Target-date funds |
24% |
$39,351 |
| Large U.S. equity funds |
22% |
$37,077 |
| GIC/Stable value funds |
13% |
$21,954 |
Market Observations
- For the month, U.S. bonds (represented by the Barclays Capital U.S. Aggregate Bond Index), U.S. Large-Cap equities (represented by the S&P 500 Index), U.S. Small-Cap equities (represented by the Russell 2000 Index), and International equities (represented by the MSCI ACWI ex-US Index) all had positive returns.
Aon Hewitt 401(k) IndexTM statistics and the returns of major market indices for periods ending April 30, 2016:
Index Statistics
| Total Transfers as Percent of Starting Balance |
0.16% |
0.97% |
| Number of Fixed Days |
14 (67%) |
59 (72%) |
| Number of Equity Days |
7 (33%) |
23 (28%) |
| Number of Above-Normal1 Days |
0 |
8 |
Indices Returns
| Barclays Capital U.S. Aggregate Bond Index |
0.4% |
3.4% |
| S&P 500 Index |
0.4% |
1.7% |
| Russell 2000 Index |
1.6% |
0.0% |
| MSCI All Country World ex-U.S. Index (net) |
2.6% |
2.3% |
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.