401(k) plan participants responded to stock market volatility in February with increased investment transfer activity, according to the Hewitt 401(k) index, which tracks daily the investment-transfer activity of nearly 1.5 million U.S. employees. February saw more activity than the same period the previous year, with a higher level of average daily net transfer activity up to 0.13% from 0.07% and 10 above-normal transfer activity days, compared with seven the year before.
The highest level of transfer activity was on Feb. 28, the day after the Dow Jones industrial average dropped to below 10,000 for the first time since April. The index reading on that day was 2.84, indicating transfer activity was nearly triple the daily average, with money moving out of fixed-income funds and into equity. High levels of transfer activity for the month also occurred on Feb. 8, 9, 10 and 14.
On average, the net transfer activity remains low in relation to total 401(k) balances at approximately 0.08% per day, the index data revealed. On Feb. 28, this activity was less than 0.25% of balances, the data showed.