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401(k) Index &  Observations Monthly Details: November 2013

401(k) Index & Observations Monthly Details: November 2013


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Market Commentary

  • Defined contribution plan participants had average daily transfer activity decline in November compared to October, according to the Aon Hewitt 401(k) Index™. On average, 0.024% of total balances transferred daily, slightly below the 12-month daily average of 0.029%. Only two days in November had transfer activity above normal* levels.
  • Capital market returns for November were mixed. While the U.S. equity experience was strong during the month with the S&P 500 Index gaining 3%, the fixed income market declined, with the Barclays Capital Aggregate Bond Index off -0.4% as interest rates rose during the period. Further, equities outside of the U.S. rose slightly, with the MSCI All Country World ex-U.S. Index gaining 0.8% in November.
  • Total net transfer activity in November amounted to $370 million or 0.24% of total participant balances. Net transfer activity favored diversified equities for 70% of trading days in November. Transfers into equities totaled $339 million of total flows or 0.22% of total assets. Excluding company stock activity, diversified equity outflows totaled $231 million or 0.15% of participant balances.
  • Net outflow activity in November was led by GIC/Stable value funds with $140 million (38%), company stock funds with $108 million (29%), and bond funds with $70 million (19%) transferring out.
  • Among the asset classes with net inflows for November, large U.S. funds gained the most receiving $184 million (50%) of flows. Additionally, international funds had $112 million (30%), while mid U.S. equity funds claimed $38 million (10%) of the monthly inflows.
  • Employee discretionary contributions, another measure of participant sentiment, increased to 65.2% invested in equities for November, up from 65.0% in October.
  • On average, participants’ overall equity allocation increased to 64.6% at the end of November, up from 64.1% in October.

The following tables show Aon Hewitt 401(k) Index™ statistics and the returns of major market indices for periods ending November 30, 2013.

Index Returns

November 2013 YTD
Barclays Capital Aggregate Bond Index -0.4% -1.5%
S&P 500 3.0% 29.1%
Russell 2000 Index 4.0% 36.1%
MSCI EAFE Index 0.8% 21.0%

Index Statistics

November 2013 YTD
Average Daily Net Activity 0.024% 0.029%
Number of Fixed Income Days 6 (30%) 109 (47%)
Number of Equity Days 14 (70%) 122 (53%)
Number of Above Normal Days 2 45

*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.

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