Human Resources

401(k) Index & Observations Monthly Details: February 2017


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February 2017 Review

February was a light month for trading activity among investors in defined contribution plans, according to the Aon Hewitt 401(k) IndexTM. On average, 0.016% of balances traded each day—the lowest level since August 2016. February had no days of above-normal1 trading.


Asset Classes with Most Trading Inflows in February

Percentage of Inflows Index Dollar Value ($ mil)
Large U.S. equity funds 39% $121
International Funds 19% $60
Target-date2 funds 16% $49


Asset Classes with Most Trading Outflows in February

Percentage of Outflows Index Dollar Value ($ mil)
Stable value funds 40% $123
Company stock funds 33% $103
Bond funds 12% $39

After combining contributions, trades, and market activity in investors’ accounts, the percentage of balances in equities was 66.4% at the end of February, up from 65.9% at the end of January. When investors made new contributions, equities were favored, with 66.7% of contributions going to equities, up from 66.1% in January.


Asset Classes with Most Contributions in February

Percentage of Contributions Index Dollar Value ($ mil)
Target-date3 funds 40% $595
Large U.S. equity funds 18% $272
Company stock funds 8% $120

Asset Classes with Largest Percentage of Total Balance at end of February

Percentage of Balance Index Dollar Value ($ mil)
Target-date funds 24% $44,775
Large U.S. equity funds 23% $42,870
Stable value funds 12% $21,966

The following table shows Aon Hewitt 401(k) IndexTM statistics for the period ending February 28, 2017:

Index Statistics

February 2017 YTD
Total Transfers as Percentage of Starting Balance: 0.17% 0.33%
# Fixed Days: 6 (32%) 13 (33%)
# Equity Days: 13 (68%) 26 (67%)
# of Above-Normal1 Days: 0 0


Market Observations

Capital markets continued to see positive gains in February, led by the ongoing rally of U.S. equities. U.S. Large-Cap equities (represented by the S&P 500 Index) increased 4% during the month, bringing returns to nearly 6% for the year. U.S. Small-Cap equities (represented by the Russell 2000 Index) and international equities (represented by the MSCI All Country World ex-U.S.A Index) each increased nearly 2% during the month. U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) increased 0.7% during February.


Indices Returns

February 2017 YTD
Bloomberg Barclays U.S. Aggregate Index 0.7% 0.9%
S&P 500 Index 4.0% 5.9%
Russell 2000 Index 1.9% 2.3%
MSCI All Country World ex-U.S.A. Index (net) 1.6% 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) 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 two 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.
3 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.



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