• As the stock market turned around and moved into positive territory in March, 401(k) participants also changed the direction of their transfers, according to the results of the Hewitt 401(k) Index™. During the first half of the month, after the Dow Jones Industrial Average closed near a 12-year low, transfers were strongly fixed income-oriented. However, a few days after the stock market turn on March 10 (when the DJIA closed up 5%), 401(k) participants began to move in the opposite direction. About two-thirds of the days during the second half of the month were equity-oriented.


• Interestingly, transfer amounts were larger during the first half of the month compared to the rest of the month. All six days with above-normal* levels of transfer activity in March occurred during the first half of the month, which illustrates the tendency that participants react more significantly to down markets versus up markets.


• As a result, for the entire month of March, the total amount transferred was still fixed income-oriented, with $440 shifted from equities to fixed income investments. In fact, March continued the trend of fixed income-oriented transfers that started June of 2008. During the first quarter of 2009, a total of $1 billion moved from equities to fixed income investments.


• In March, GIC/stable value funds received 90% of the inflows, with $502 million moving into this asset class. It is also the biggest winner for the quarter — nearly $1.1 billion moved into this asset class during the first quarter. Money market funds also received $53 million in inflows during March, and $78 million in the first quarter.


• On the other hand, company stock experienced $117 million in outflows during March. Large U.S. equity funds also had $89 million in outflows, followed by balanced and lifestyle funds with outflows of $83 million each.


• Throughout the quarter, the biggest losers were large U.S. equity ($284 million in outflows), international ($269 million in outflows), balanced ($262 million in outflows), and lifestyle funds ($216 million in outflows).


• Due to the market surge in March, participants' overall equity holdings went up slightly from 47.7% at the end of February to 49.1% at the end of March.


• However, employee sentiment did not appear swayed — employee-only equity contributions declined further from 57.2% to 55.7% in March.

*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 March 2009:

Dow Jones IA	7.93%
Russell 2000	8.93%
Barclays Capital Aggregate Bond Index	1.39%
S&P 500	8.76%
MSCI EAFE	6.34%
NASDAQ	10.94%

Number of Fixed Income Days	14
Number of Equity Days	8
Percent of Equity Days	36%