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Aon Hewitt: 401(k) Participants Keep Moving Away From Equities

401(k) plan participants last November maintained a now six-month trend in moving money to fixed income from equities, according to Aon Hewitt's November 401(k) Index.

January 3, 2012

401(k) plan participants last November maintained a now six-month trend in moving money to fixed income from equities, according to Aon Hewitt's November 401(k) Index.

In November, $253 million, or 0.2%, of 401(k) assets was transferred among investment options, with fixed-income investment options receiving the majority of the net transfers, according to a news release from Aon Hewitt. Bond funds received $149 million, the largest amount of total inflow activity, followed by stable value, at $94 million. Money market funds gained $6 million.

It was the opposite story for equities as nearly all types of equities saw net outflows. Including sponsoring company stock, $239 million of all transfers came from equities. U.S. small-cap equity funds had the largest outflows, totaling $67 million, or 28% of total outflows. International funds lost $43 million, followed by U.S. large-cap equity funds, which lost $36 million for the month.

Transfer activity was slightly below average for the month, with 0.033% of balances transferred on average during November, according to the news release.

The average participant equity allocation declined to 58.6% from 58.8% a month earlier. Employee-only contributions directed to equities also continued to decline in November to 60.8%, from 61.5% in October. Contributions to equities have steadily fallen since July, according to the release.

Aon Hewitt spokeswoman MacKenzie Lucas said in an email that the Aon Hewitt office was closed and that no one was available for comment.

The 401(k) Index universe is made up of Aon Hewitt's record-keeping clients, which have about $100 billion in total assets.

Kevin Olsen writes for Pensions & Investments, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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