Human Resources
401(k)

401(k) Index & Observations Monthly Details: October 2014

Market Commentary

  • For defined contribution plan participants, October was a heavy trading month according to Aon Hewitt’s 401(k) Index™ with seven days of “moderate” or “high” trading activity—the most days of above-normal trading in a month since May 2013. Overall, nearly $400 million of 401(k) balances transferred in the month, representing roughly 0.25% of total assets—both record highs for the year.
  • All but one of the above-normal days had participants favoring fixed income funds over equities. Fixed income assets were favored over equities on 57% of the trading days in October. Transfers away from diversified equities (equity assets excluding company stock) totaled $228 million.
  • Fixed income funds also saw the most inflows in October. Bond funds gained $176 million (44% of all asset trades), GIC/stable value funds received $119 million (30%) while money market took in $65 million (16%). Company stock funds led the net outflow activity with $110 million (27%), followed by small U.S. equity and mid U.S. equity with $102 million (26%) and $85 million (21%), respectively. Lifestyle/premixed funds lost $78 million (20%).
  • After incorporating trading and market activity, participants’ overall allocation to equities increased marginally to 65.7% from 65.5% last month. Future contributions to equities decreased to 66.4% from 67.0%.
  • While October was a volatile month for the markets, most indices trended upward. U.S. large-cap equities, as measured by the S&P 500 Index, returned 2.4% during the month of October. Small-cap equities outperformed their large-cap counterparts as the Russell 2000 gained 6.6%. The Barclays U.S. Aggregate Index, a measure of the fixed income market, posted a return of 1.0% and the MSCI All Country World ex-U.S. Index, a benchmark used to represent companies based in the developed markets outside of the U.S., had its second consecutive month of negative performance with a return of -1.0%.

The following tables show Aon Hewitt 401(k) Index™ statistics and the returns of major market indices for periods ending October 31, 2014:


Index Statistics

October 2014 YTD
Average Daily Net Activity 0.030% 0.023%
Number of Fixed Income Days 13 (57%) 110 (53%)
Number of Equity Days 10 (43%) 97 (47%)
Number of Above Normal Days 7 19


Indices Returns

October 2014 YTD
Barclays Capital Aggregate Bond Index 1.0% 5.1%
S&P 500 2.4% 11.0%
Russell 2000 Index 6.6% 1.9%
MSCI All Country World ex-U.S. Index (net) -1.0% -1.0%

*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.

The Office Location search is currently unavailable.