LINCOLNSHIRE, Ill. (July 8, 2016) – Despite a slow start to 401(k) trading activity in June, data from Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), showed the month ended with three days of higher-than normal trading activity following Britain’s vote to leave the European Union.
According to the Aon Hewitt 401(k) Index™, which tracks the 401(k) trading activities of nearly 1.3 million participants, representing nearly $160 billion in collective assets, trading for the month of June largely favored fixed income funds. However, following two days of market losses, trading on June 28 heavily favored equities.
“401(k) investor behavior immediately following the Brexit vote has not followed the typical investor activity we’ve seen following other major market corrections,” explained Rob Austin, director of Retirement Research at Aon Hewitt. “There was not a strong knee-jerk reaction to the market volatility, and when investors did respond, their initial inclination was to take advantage of lower priced equities. The early trading days of July indicate investors are moving toward safer investments in the form of fixed income.”
Other key findings for June:
- A total of 0.19 percent of balances traded in June with 18 out of the 22 days favoring inflows to fixed income instruments
- GIC/stable value funds received 42 percent of inflows
- Company stock funds and target-date funds had the largest percentage of outflows (36 percent and 22 percent)
Other key findings for Second Quarter of 2016:
- 0.32 percentage point decrease in balances traded compared to the first quarter of 2016 (0.82 percent to 0.50 percent)
- Bond funds received nearly half of all inflows (45 percent)
- Large U.S. equity funds and company stock saw the largest percentage of outflows (32 percent and 24 percent)
More information on the Aon Hewitt 401(k) Index, including supporting graphics can be found here.
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 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 2 times the average daily net activity of the preceding 12 months.
 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.
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