• 401(k) participants moved assets out of equity into fixed income investments again in July, according to the results of the Hewitt 401(k) Index™. In fact, net transfers were fixed income oriented on 91% of the days during the month.
  
• Over $692 million was shifted out of equities into fixed income asset classes in July. In particular, participants transferred monies out of both domestic and international equity markets due to the volatilities in both markets. Approximately $228 million moved out of large U.S. equity funds, and $208 million moved out of international funds. In addition, $144 million was transferred out of balanced funds during the month.
  
• Similar to the first half of 2008, GIC/stable value funds were the largest recipients of the net transfers. In July, inflows ($659 million) to this asset class represented 83% of the net transfers. Bond funds also received 13% of the net inflows, representing $101 million.
  
• Despite the fixed income oriented transfers, most 401(k) participants remained calm, when measured by the level of transfers. Only 0.05% of account balances were transferred on a daily net basis. Furthermore, transfer activity was above normal* levels during only three days of the month.
  
• The combination of transfers and poor market conditions resulted in a decline in overall equity exposure. Only 61.7% of participants' assets were allocated to equity investments by the end of July, returning to a level last seen in the middle of 2003.
  
• In terms of employee equity contribution (participant discretionary contribution), it also slid by 1.3% from end of June to 64.0% at the end of July.

*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 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 two times the average daily net activity of the preceding 12 months.

The following tables show Hewitt 401(k) Index statistics and the returns of major market indices for the month of July 2008:

Dow Jones IA	0.43%
Russell 2000	3.70%
Lehman Aggregate	-0.08%
S&P 500	-0.84%
MSCI EAFE	-3.21%
NASDAQ	1.42%

Number of Fixed Income Days	20
Number of Equity Days	2
Percent of Equity Days	9%