401(k) Index & Observations Monthly Details: February 2017
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February 2017 Review
February was a light month for trading activity among investors in defined contribution plans, according to the Aon Hewitt 401(k) IndexTM. On average, 0.016% of balances traded each day—the lowest level since August 2016. February had no days of above-normal1 trading.
Asset Classes with Most Trading Inflows in February
|
Percentage of Inflows |
Index Dollar Value ($ mil) |
| Large U.S. equity funds |
39% |
$121 |
| International Funds |
19% |
$60 |
| Target-date2 funds |
16% |
$49 |
Asset Classes with Most Trading Outflows in February
|
Percentage of Outflows |
Index Dollar Value ($ mil) |
| Stable value funds |
40% |
$123 |
| Company stock funds |
33% |
$103 |
| Bond funds |
12% |
$39 |
After combining contributions, trades, and market activity in investors’ accounts, the percentage of balances in equities was 66.4% at the end of February, up from 65.9% at the end of January. When investors made new contributions, equities were favored, with 66.7% of contributions going to equities, up from 66.1% in January.
Asset Classes with Most Contributions in February
|
Percentage of Contributions |
Index Dollar Value ($ mil) |
| Target-date3 funds |
40% |
$595 |
| Large U.S. equity funds |
18% |
$272 |
| Company stock funds |
8% |
$120 |
Asset Classes with Largest Percentage of Total Balance at end of February
|
Percentage of Balance |
Index Dollar Value ($ mil) |
| Target-date funds |
24% |
$44,775 |
| Large U.S. equity funds |
23% |
$42,870 |
| Stable value funds |
12% |
$21,966 |
The following table shows Aon Hewitt 401(k) IndexTM statistics for the period ending February 28, 2017:
Index Statistics
| Total Transfers as Percentage of Starting Balance: |
0.17% |
0.33% |
| # Fixed Days: |
6 (32%) |
13 (33%) |
| # Equity Days: |
13 (68%) |
26 (67%) |
| # of Above-Normal1 Days: |
0 |
0 |
Market Observations
Capital markets continued to see positive gains in February, led by the ongoing rally of U.S. equities. U.S. Large-Cap equities (represented by the S&P 500 Index) increased 4% during the month, bringing returns to nearly 6% for the year. U.S. Small-Cap equities (represented by the Russell 2000 Index) and international equities (represented by the MSCI All Country World ex-U.S.A Index) each increased nearly 2% during the month. U.S. bonds (represented by the Bloomberg Barclays U.S. Aggregate Index) increased 0.7% during February.
Indices Returns
| Bloomberg Barclays U.S. Aggregate Index |
0.7% |
0.9% |
| S&P 500 Index |
4.0% |
5.9% |
| Russell 2000 Index |
1.9% |
2.3% |
| MSCI All Country World ex-U.S.A. Index (net) |
1.6% |
5.2% |
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) 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.
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.
3 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.