With an average of 0.035% of balances traded each day—the highest
level since January 2013, investors in defined contribution (DC) plans kept
busy for the month of November, according to the Aon Hewitt 401(k) index.
Trading activity levels were reported above-normal just days
before the November 8 presidential election, with trades moving money from equities
to fixed income. There were eight above-normal trading days in November alone,
the highest since May 2015.
Among the top in recent history and the highest trading day
of 2016 was November 9 when balances traded were at 0.10%,
about four and a half times the normal trading level. Following the immediate
volatility that occurred after the election, investors were trading into
equities at a slower pace for the second half of November.
For asset classes with the most inflows, GIC/stable value
funds came in first with $255 million, followed by money market funds ($100
million) and small U.S. equity funds ($56 million). Asset classes with the most
outflows included company stock funds ($370 million), bond funds ($74 million)
and specialty/sector funds ($38 million).
Combining contributions, trades and market activity in
participants’ accounts, the percentage of balances in equities at the end of the month was 65.0%,
a minimal increase from 64.4% at the end of October. New contributions saw no
change from the previous two months, however, with 65.7% of employee
contributions investing in equities.