Defined contribution plan participants favored investments in fixed income in February, a reversal of trends from the past four months, according to Aon Hewitt's 401(k) Index.
Net transfer activity for February moved slightly away from diversified equities by $21 million, but total transfer activity across the Index was low, at $264 million.
Employees who made discretionary contributions to equities increased to 66.5 percent in February, up from 65.6 percent in January.
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Overall, participants' equity allocation increased to 65.5 percent at the end of February, up from 64.7 percent in January.
Global equity markets rebounded from a poor showing in January, Aon Hewitt found. U.S. equities, as measured by the S&P 500, gained 4.6 percent, and non-U.S. equities, as measured by the MSCI All Country World ex-U.S. Index, gained 5.1 percent.
Emerging markets also increased in February, returning 3.3 percent.
Fixed income asset classes experienced net inflows in February. Bond funds had the largest inflows with gains of $79 million and GIC/stable value funds had gains of $51 million. Specialty/sector funds had $35 million of monthly inflows, while international funds and self-directed window funds both received around $29 million, according to Aon Hewitt.
Net outflow activity was led by company stock funds with $191 million, large U.S. equity funds with $37 million and small U.S. equity funds with $29 million transferring out.
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