Human Resources
401k index

401(k) Index & Observations Monthly Details: April 2012

Market Commentary

  • Average transfer activity remained low in April, with just 0.026% of total defined contribution plan balances transferring daily, on average, according to the Aon Hewitt Index™. While this is up slightly from March (0.024%), it remains much lower than the twelve-month trailing daily average of 0.032%. So far, 2012 is again illustrating increased participant investment management passivity. Only one day in April had transfer volume exceed normal levels.
  • April was the first month in 2012 that the net direction of transfers moved back toward fixed income, as 60% of days had net transfer activity away from equities. Out of a modest $136 million in net transfer activity for the month, $112 million moved from equities to fixed income investments. Of the net equity outflows, $35 million (25%) came from company stock, which means $76 million of the outflows are distinguishably from diversified equities (0.08% of total balances).
  • Small U.S. equity assets accounted for 46% ($63 million) of the diversified equity outflows, followed by large U.S. at 13% ($17 million). Emerging markets accounted for 9% ($12 million) of the outflows.
  • GIC/stable value and bond asset classes absorbed the majority of the inflows, as each respectively received 46% ($63 million) and 20% ($28 million). Premixed funds, including target-date and target-risk funds, also received 21% ($29 million) of the net inflows for the month.
  • Following the strong first quarter returns (strongest quarter since 1998), as equity markets declined throughout April, employee discretionary contributions—a gauge of participant sentiment—withdrew slightly to 62.2% in equity allocations (down from 62.6% in March).
  • The total asset allocation in equities also declined nominally. Equities now hold 60.4% of total assets, which is a 0.2% decrease for the month.

The following tables show Hewitt 401(k) Index statistics and the returns of major market indices for the month of March 2012:

Index Returns

Dow Jones Industrial Average 0.16%
Russell 2000 Index -1.54%
Barclays Capital Aggregate Bond Index 1.11%
S&P 500 -0.63%
MSCI EAFE Index -1.96%
NASDAQ Index -1.46%
MSCI Emerging Markets Index (Net) -1.20%

Index Statistics

Number of Fixed Income Days 8
Number of Equity Days 12
Percent of Equity Days 60%


*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.

Index Data Reports

Relative Transfer Activity (April 2012)

Asset Allocation - Supporting Data (April 2012)

Balances in Stock Investments (April 2012)

Monthly Details: Aon Hewitt 401(k) Index™ Observations