The Hewitt 401(k) index for March showed that 401(k) plan participants maintained normal daily transfer activity after the U.S.-led war with Iraq began March 19. Transferred money was invested in fixed income on 57% of the days throughout the month, up from 35% a year earlier. But participants did appear to react to daily war news: on March 21, when the stock market rose on news of a coalition advance toward Baghdad, more of the money being moved was transferred to equity investments. On March 24, however, with a sinking market and reports of setbacks among U.S. forces, more money shifted to fixed income.
In the first quarter, 401(k) participants shifted $660 million to GIC and stable value investments, mainly from large-cap U.S. equity and company stock investments, the index showed. GIC/stable value is currently the largest asset class in the Hewitt 401(k) index, with 28.9% of assets. U.S. equities had 19.7% of assets, down from 23.88% on March 31, 2002.
The Hewitt index tracks 1.5 million 401(k) participants with a total of $68 billion in assets.
