• In reaction to another significant stock market downturn in November, 401(k) participants continued to transfer out of equities and into fixed income investments, albeit, on a smaller scale when compared to that of September and October, according to the results of the Hewitt 401(k) Index™. A total of $336 million shifted out of equity funds on a net basis in November, which is less than half the equity outflow in October. The direction of transfers was fixed income-oriented during 58% of the days in the month.


• On average, 401(k) participants transferred 0.06% of balances on a net daily basis in November (slightly above the trailing average of the past 12 months). The level of transfers was above normal* four days of the month, with monies moving toward fixed income investments on all four days. Interestingly, each of the four days was immediately following large declines in the stock market.


• Stable value funds again were the biggest winner in November, with $342 million moving into these funds. By the end of the month, the allocation to stable value was at a historical high, with 33.4% of total 401(k) assets in this asset class, up from 20.5% just one year ago. Balanced and money market funds also received $61 million and $12 million in inflows, respectively.


• Meanwhile, the outflows mainly came from large U.S. equity, lifestyle, company stock, and international funds. Large U.S. equity lost $86 million in outflows during the month. Over the past three months, after the market took a sharp dive, a total of $528 million has moved out of this asset class. Lifestyle funds experienced $86 million in outflows in November, with a total of $484 million shifted out of this asset class during the past three months.


• Marked by continuing market declines and fixed income-oriented transfers, November's overall equity allocation slid to 51.9%. This again reached the lowest level since the beginning of the index (in 1997).


• Employee only contribution, which is another measure of overall participant sentiment, also declined to new low of 58.4% by the end of November, from the historical low level of 59.9% at the end of October.

*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 November 2008:

Dow Jones IA	-4.85%
Russell 2000	-11.83%
Lehman Aggregate	3.26%
S&P 500	-7.18%
MSCI EAFE	-5.41%
NASDAQ	-10.77%

Number of Fixed Income Days	11
Number of Equity Days	8
Percent of Equity Days	42%