Record keepers and researchers say the recent stock market volatility prompted an increase in inquiries from defined contribution plan participants, but trading activity didn't always fit what might be considered a typical response of moving some equity holdings to fixed income. For example, trading activity among participants in DC plan clients of Wells Fargo Institutional Retirement Plans and Trust, Minneapolis, showed money moving from equities to balanced funds and target-date funds on Feb. 5, when the Dow Jones industrial average fell 1,175 points, and on Feb. 6, when the index gained 567 points.
"It was surprising to us," said Jeffrey Kletti, head of investments.
On the other hand, Alight Solutions reported that overall trading on Feb. 5-6 featured shifts from equities to fixed-income investments such as stable value, bond funds and money market funds. "It was a fairly standard response" when stocks fall sharply, said Robert Austin, the Charlotte, N.C.-based director of research.
Some DC plan sponsors received few calls from participants. Plan executives speculated — as did record keepers and researchers — that activity during the latest stock market gyrations might have been muted because so many participants now invest in target-date funds. These investments, they added, might give participants a greater sense of comfort or security during stock market turmoil.
Continuing education about long-term investing likely contributed to participants' behavior as well, the executives said.