Products December 30, 2011

University of Delaware Announces Investment Option Changes

December 30, 2011 (PLANSPONSOR.com) – The University of Delaware has partnered with Fidelity Investments to offer 403(b) and 457 plan investment options with lower overall fund expenses.
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The University introduced a new share class called Fidelity Class K Shares and a new series of Fidelity target-date retirement mutual funds called Fidelity Freedom K Funds. The Class K Shares offer the same investment strategy and risk as the current, share class, but the overall expenses will be lower.   

Fidelity Freedom K Funds have the same management team, investment objectives and will invest in the same underlying funds as the Fidelity Freedom Funds, but since they are designed as Fidelity’s institutional target-date series of mutual funds, Fidelity Freedom K Funds have lower expense ratios than the corresponding target-date Fidelity Freedom Funds.  

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The investment option changes will be effective as of market close on January 11, 2012.
Benefits December 29, 2011

Aon Hewitt Releases 401(k) Data

December 29, 2011 (PLANSPONSOR.com) - Aon Hewitt released its 401(k) Index Observations for the month of November.
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November 2011 – Index Activity Over Time

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Year

Average Daily Net Activity

Number
of Above
Normal Days

% of Fixed – Income Days

 

2011

0.033%

5

48%

2010

0.03%

2

24%

2009

0.03%

0

45%

2008

0.06%

4

58%

2007

0.04%

4

76%

2006

0.03%

0

38%

2005

0.03%

0

24%

2004

0.05%

4

29%

2003

0.06%

0

26%

2002

0.09%

7

55%

2001

0.07%

4

38%

2000

0.06%

0

62%

1999

0.07%

3

38%

1998

0.06%

5

45%

1997

0.04%

0

53%

 

  • Participant transfer activity was slightly below average during November, with 0.033% of balances transferred on average during November, according to the results of the Hewitt 401(k) Index™. All together $253 million (0.20%) of total 401(k) assets transferred between funds.
  • The direction of transfers was almost an even split in terms of net flows—with 52% of November days in favor of equities, while 48% of the days favored fixed income investments. Despite this fact, the net dollars moved for the overall month again favored fixed income funds—a consistent trend since June.

  • Nearly all equity asset classes saw net outflows. Including company stock, $239 million of all transfers came from equities. Small U.S. equity funds had the largest outflows in November, totaling $67 million (representing 27% of total outflows). International funds experienced $43 million (17%) of outflows, and large U.S. equity funds lost $36 million (14%) for the month.
  • Fixed income asset classes received most of the net transfers, with bond funds receiving the largest amount of $149 million (59%) of total inflow activity. Stable value funds received $94 million (37%), while money market funds had nominal gains of $6 million.
  • Participant discretionary contributions directed to equities (employee only contributions) continued to decline from 61.5% in October to 60.8% in November. Contributions to equities have been falling steadily since July and are a reasonable gauge of participant sentiment.
  • The overall average participant equity allocation declined from 58.8% to 58.6%. The primary driver of this was participant transfers, while market movement had a negligible impact.

The following tables show Hewitt 401(k) Index statistics and the returns of major market indices for the month of November 2011:

Index Returns

 

Dow Jones IA

1.18%

Russell 2000

-0.36%

Barclays Capital Aggregate Bond Index

-0.09%

S&P 500

-0.22%

MSCI EAFE

-4.85%

NASDAQ

-2.39%

MSCI Emerging Markets Index (Net)

-6.66%

 

Index Statistics

 

Number of Fixed Income Days

10

Number of Equity Days

11

Percent of Equity Days

52%

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