401(k) Index & Observations Monthly Details: January 2017
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January 2017 Review
2017 started with light trading activity for investors in defined contribution plans, according to the Aon Hewitt 401(k) IndexTM. There were no days of above-normal1 trading in January. On average, 0.017% of balances traded each day. For 13 of the 20 trading days in January, participants favored equities over fixed income funds in their trades.
Asset Classes with Most Trading Inflows in January
|
Percent of Inflows |
Index Dollar Value ($ mil) |
| Large U.S. equity funds |
39% |
$112 |
| International funds |
23% |
$66 |
| Mid U.S. equity funds |
13% |
$36 |
Asset Classes with Most Trading Outflows in January
|
Percent of Outflows |
Index Dollar Value ($ mil) |
| Stable value funds |
40% |
$114 |
| Company stock funds |
30% |
$86 |
| Bond funds |
15% |
$43 |
After combining contributions, trades, and market activity in participants’ accounts, the percentage of balances in equities was 65.9% at the end of January, up from 65.4% at the end of December. New contributions continue to favor stocks, with 66.1% of employee contributions were into equities—an increase from 65.2% in December.
Asset Classes with Most Contributions in January
|
Percent of Contributions |
Index Dollar Value ($ mil) |
| Target-date2 funds |
43% |
$560 |
| Large U.S. equity funds |
18% |
$240 |
| International funds |
8% |
$105 |
Asset Classes with Largest Percentage of Total Balance at end of January
|
Percent of Balance |
Index Dollar Value ($ mil) |
| Target-date2 funds |
24% |
$43,361 |
| Large U.S. equity funds |
23% |
$41,087 |
| Stable value funds |
12% |
$22,137 |
The following table shows Aon Hewitt 401(k) IndexTM statistics for the period ending January 31, 2017:
Index Statistics
| Total Transfers as Percent of Starting Balance |
0.16% |
| # of Fixed Income Days |
7 (35%) |
| # of Equity Days |
13 (65%) |
| # of Above-Normal1 Days |
0 |
Market Observations
The markets in January saw positive gains. International equities (represented by the MSCI All Country World ex-USA Index) increased 3.5% and U.S. Large-Cap equities (represented by the S&P 500 Index) increased by nearly 2%. U.S. Small-Cap equities (represented by the Russell 2000 Index) increased 0.4% and U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) increased 0.2% during January.
The following tables show the returns of major market indices for periods ending January 31, 2017:
Indices Returns
| Bloomberg Barclays U.S. Aggregate Index |
0.2% |
| S&P 500 Index |
1.9% |
| Russell 2000 Index |
0.4% |
| MSCI All Country World ex-U.S.A. Index (net) |
3.5% |
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.